- The Federal Reserve delivered a relatively dovish final statement of the year.
- It left interest rates unchanged and pointed to three cuts in 2024.
- Litecoin and XRP recovered slightly after the Fed decision.
Ripple (XRP) and Litecoin (LTC) prices drifted upwards after the Federal Reserve concluded its final decision of the year. LTC rose slightly to a high of $74, which was higher than this week’s low of $70.
Similarly, Ripple’s XRP token rose to a high of $0.6356, a few points above this week’s low of $0.5942. The two coins are slightly below the highest point this year.
Federal Reserve dovish tone
The Federal Reserve concluded its two-day meeting on Wednesday and delivered a dovish statement. As expected, the bank decided to leave rates unchanged for the third meeting. It left them intact between 5.25% and 5.50%, their highest point in over 22 years.
The dot plot, a closely watched figure, showed that the Fed would likely deliver three cuts in 2024. In his statement, Jerome Powell noted that the committee saw real evidence that inflation, especially core CPI, was falling.
He also said that the members started talking about cutting rates in 2024. The cuts will be part of the monetary policy normalization and not a sign that the economy is weakening. Recent economic data showed that the economy was still strong, signaling that the bank was succeeding in engineering a soft landing. In a statement, an analyst at JPMorgan said:
“They went from higher for longer in September to talking about rate cuts. They were behind the curve on inflation, but maybe they want to be ahead of the curve in terms of a slowdown.”
The dovish tone is a positive catalyst for risky assets like cryptocurrencies and stocks. Indeed, the Dow Jones index jumped to a record high of $37,090 while the Nasdaq 100 and S&P 500 indices rose by over 1%.
The VIX, US dollar index (DXY), and US bond yields also retreated in anticipation of rate cuts. With the Fed cuts now priced in, crypto investors will now focus on the upcoming Bitcoin ETF approval and Bitcoin halving.
XRP price forecast
Ripple’s XRP jumped to a high of $0.7012 last week as cryptocurrencies continued their bull run. It then retreated earlier this week and bounced back slightly after the Fed decision. The coin has moved slightly below the key support level at $0.6372, its highest swing on November 26th.
Also, the Relative Strength Index (RSI) has moved from 32 and is nearing the neutral point at 50. Most importantly, it has formed a small evening star pattern, which is a bearish sign. Therefore, Ripple will likely resume the downtrend and retest the support at $0.60. A move above the resistance at $0.6372 will point to more upside.
Litecoin price prediction
Litecoin price peaked at $79.60 last week and then pulled back this week as cryptocurrencies retreated. This pullback saw it retest the support at $70. It has now bounced back and crossed the crucial resistance at $72. The Relative Strength Index (RSI) has pointed upwards while the price remains below the 50-day moving average.
Therefore, the short-term outlook for LTC is moderately bearish, with the next point to watch being at $70. In the longer term, however, a bullish turn cannot be ruled out.
