XRP Price Prediction as Arthur Hayes Says AI Bubble Could Trigger Crypto Market Rally

Ripple (XRP) price is down by 0.53% today, August 5, to trade at $1.06 at the time of writing. This drop comes as the broader crypto market fails to gain despite easing geopolitical tensions.

The co-founder of BitMEX, Arthur Hayes, now says that crypto prices could gain if the AI stocks begin to drop, because this could lead to the Fed lowering interest rates, with this move increasing demand for crypto assets.

Arthur Hayes Predicts Crypto Market Rally Amid AI Bubble Fears

Hayes outlined his bullish outlook on the crypto market in a post on Substack dubbed “Situationship,” where he said that the current demand for AI stocks is similar to what occurred in 2008 when many investors piled into real estate, leading to the 2008 financial crisis.

He notes that if people begin to sell AI stocks, the prices of these stiocks will fall, and risk causing an economic fallout. That would then prompt the Federal Reserve to intervene by reducing interest rates.

If the Fed trims rates, it could lead to investors exiting their treasury yields for risk assets such as XRP, with this driving gains in price.

An earlier report by CoinGape also noted that billionaire Ray Dalio believes that signs are emerging to suggest that AI stocks are on the verge of dropping, and urged traders to purchase gold or Bitcoin. \

XRP Prediction as Price Remains Stuck on Consolidation

The price of XRP remains between $1.05 and $1.09 since July 28, with this suggesting that the buying pressure is too weak to support a sustained upward move.

Still, XRP price has closed below the support of $1.07, suggesting that bears are tightening their grip. If XRP extends this drop to the lower boundary of the channel, it could move to the psychological support of $1.

The RSI reading of 41 supports a bearish XRP price forecast, and this increases the odds of the price dropping to $1.

But if buyers come back amid bullish developments surrounding XRP, such as Ripple’s new investment in ZILO and Licuido to bring tokenization to XRP Ledger, the price could close above the resistance of $1.10.

XRP ETFs Flow Dry Up as Shorts Boost Positions

Data from SoSoValue shows that XRP ETFs had zero inflows on August 4 despite bullish forecasts of an AI bubble burst being bullish for the crypto market. This ended four straight days of inflows that the ETFs recorded between July 29 and August 3.

The weakening demand also comes on the back of rising short positions on XRP as short-sellers bet that the price will drop.

Data from CoinGlass shows that the XRP long/short has dropped to 0.94, suggesting that there are more short positions than long positions.

The weighted funding rate has also dropped from 0.0095% on August 1 to 0.0037 at the time of writing, suggesting that the demand for long positions is fading