XRP Price Drops 5% After Hawkish Fed Signal: Can $1.35 Hold?

XRP fell roughly 5% to $1.38 on Aug. 28, reversing from a weekly high near $1.47 after Federal Reserve Chair Kevin Warsh delivered a hawkish message at the Jackson Hole Economic Symposium.

The decline came as traders reassessed the outlook for U.S. interest rates, triggering a broader sell off across risk assets. XRP's pullback also followed a strong month in which the token remained up roughly 39%.

Despite the correction, the key question for XRP bulls is whether the $1.35 - $1.40 support zone can hold.

Hawkish Fed Remarks Hit Crypto Markets

Warsh emphasized that the Federal Reserve remains focused on bringing inflation back toward its 2% target.

His comments prompted markets to reassess expectations for the September policy meeting. Rate hike odds reportedly climbed from roughly 36% to 56%, increasing pressure on risk assets.

The Fed's shift toward a more strictly data dependent approach also added uncertainty. Without clear forward guidance on future rate decisions, investors have fewer signals about the direction of monetary policy.

That matters for crypto because higher interest rates can reduce liquidity and make speculative assets less attractive.

XRP was therefore caught in a broader risk-off move rather than facing a token-specific shock.

XRP Gives Back Part of Its Recent Rally

Before the reversal, XRP had climbed to around $1.47 during the week.

The subsequent drop to $1.38 erased a portion of those gains, but the broader trend remains considerably stronger than it was earlier in the month.

XRP is still up around 39% over the past month, supported in part by sustained demand for U.S. spot XRP ETFs.

That makes the current pullback particularly important from a technical perspective. A correction after a sharp rally does not automatically invalidate the bullish structure.

Instead, traders are now watching whether buyers can defend the latest breakout zone.

$1.35 Is the Key XRP Support Level

The $1.35 - $1.40 region is now the most important support area for XRP.

The zone also sits around the token's 200-day exponential moving average, giving the level additional technical significance.

Holding above this area would allow XRP to consolidate while preserving much of its recent recovery.

A move back above $1.45 would strengthen the short-term structure and could put $1.60 back into focus.

The bigger risk comes if XRP decisively breaks below $1.35.

Such a move would weaken the recent breakout and could expose the token to a deeper correction toward approximately $1.16.

XRP's ETF Demand Remains a Bullish Factor

The latest decline comes after a period of strong institutional interest in XRP investment products.

U.S. spot XRP ETFs recently extended a prolonged streak of daily inflows, showing that demand for regulated XRP exposure has remained resilient even as the broader crypto market has become more volatile.

Related: XRP ETFs Extend Inflow Streak to Nine Days as Demand Rebounds

That creates an important contrast: macro conditions are putting pressure on XRP while institutional flows have provided underlying support.

Whether that demand remains strong could determine how quickly XRP recovers from the latest Fed driven sell-off.

What Comes Next for XRP?

XRP's near-term direction will likely depend on the interaction between monetary policy expectations and its technical structure.

A sustained hold above $1.35 - $1.40 would keep the medium-term recovery intact and give bulls another opportunity to reclaim $1.45.

A break above that level could reopen the path toward $1.60.

However, another wave of hawkish repricing combined with a break below $1.35 would significantly increase downside risk, with $1.16 emerging as a potential next support zone.

For now, the correction looks more like a macro driven test of support than a confirmed reversal.