XRP Forecast: Will FX Volatility Drag XRP Toward the $1.82 Support?

XRP plunges to a $2.05 low on Monday, December 1, as Bitcoin (BTC) drops below $90,000, pulling the broader market deep into the red. BTC-spot ETF outflows of $3.47 billion in November signaled a decline in institutional demand. Monthly outflows set the stage for a bearish start to December.

Increasing bets on a Fed rate cut and Bank of Japan rate hike have raised the risk of a yen carry trade unwind, impacting risk assets. Notably, the Nikkei 225 slid 1.23% in morning trading, underscoring market jitters ahead of the upcoming Fed and BoJ interest rate decisions.

Modest inflows into XRP-spot ETFs have added to the negative sentiment as BlackRock (BLK) continues to sit on the sidelines.

This morning’s price action and bearish technical indicators reinforced my bearish short-term (1-4 week) outlook. In my view, the current market dynamics increase the risk of a near-term drop to the November low of $1.82.

Below, I will explore the key drivers behind the pullback, the medium-term (4-8 week) outlook, and the key technical levels traders should watch.

Yen Carry Trade Unwind Risks Hit Sentiment

BTC fell 3.39% to $87.337, with XRP sliding 3.35% to $2.0834 in morning trading. USD/JPY fell 0.30% to 155.666 in morning trading on December 1, weighing on risk appetite. USD/JPY trends can materially impact buyer demand for BTC and the broader crypto market. Here’s what crypto traders need to know:

Economists have raised bets on a Fed rate cut and a Bank of Japan hike in December, sending USD/JPY lower. Notably, the Fed ends Quantitative Tightening (QT) on December 1, setting the stage for a narrower US-Japan interest rate differential, in favor of the yen. The likelihood of a Fed rate cut on top of an end to QT and a BoJ rate hike could push USD/JPY toward 140.

Typically, sharp FX movements trigger margin calls, which force traders to unwind yen carry trades. Carry trades involve borrowing a financial instrument with a low interest rate to buy another instrument with a higher interest rate or risk assets that typically yield higher returns.

The unwinding of carry trades impacts risk assets and further boosts yen strength.

For context, the Bank of Japan cut purchases of Japanese Government Bonds (JGBs) and raised interest rates in July 2024. The policy adjustment coincided with a dovish Fed policy outlook, triggering a yen carry trade unwind. USD/JPY plunged from 161.951 to 139.576 in response.

Bitcoin slid from a pre-BoJ decision high of $69,912 to a low of $49,351 as traders exited risk assets to pay back yen loans. Fast forward to December 2025, and XRP traders face a similar risk, supporting a bearish short-term outlook.

Bearish Near-Term, But Bullish Medium-Term

The short-term bearish outlook remains intact, given the risks of a yen carry trade and waning institutional demand for XRP-spot ETFs. Inflows of $666.61 million into XRP-spot ETFs since launch fell short of BTC-spot ETF flows at launch, weighing on sentiment. Analysts had expected pent-up institutional demand to fuel stronger inflows.

Notably, Franklin XRP ETF (XRPZ) reported inflows of just $85.22 million since launch despite Franklin Templeton being the 19th largest ETF issuer by assets under management. Canary XRP ETF (XRPC) has led the way, with inflows of $343.67 million, benefiting from a first-to-market advantage. However, $243.05 million of total inflows came on day one of trading, suggesting that the advantage is diminishing.

While the near-term outlook remains bearish, the medium-term outlook looks more bullish. Several events, including the progress of the Market Structure Bill on Capitol Hill and the Fed’s interest rate decision, will be key.

Market Structure Bill Gains Momentum

XRP rallied 14.69% on July 17, 2024, after the House passed the bill to the Senate. The token will likely benefit from the Senate passing the bill, which would open the door to a broader investor base.

Crypto in America host Eleanor Terrett shared the latest developments on Capitol Hill, stating:

“Just had a call with an industry source who recently met with a group of Senate Dems working on market structure legislation. The source said one of the members noted that they are preparing for a possible markup of a bipartisan market structure bill the week of December 8.”

Delays to crypto legislation have contributed to XRP’s pullback from its July all-time high of $3.66. However, bipartisan support for the Market Structure Bill and progress toward a January vote will likely boost sentiment, supporting a bullish medium-term (4-8 week) outlook.

XRP Recovery at Risk

The current short- and medium-term dynamics hinge on crypto legislative developments, a dovish Fed rate cut, and increased demand for XRP-spot ETFs. These scenarios would support a move to a July all-time high of $3.66 (on Binance).

However, several events could unravel the bullish medium-term outlook. These scenarios include:

• The MSCI delists digital asset treasury companies (DATs), curbing interest in XRP as a treasury reserve asset.
• The Senate stalls the Market Structure Bill.
• Weak institutional demand for XRP-spot ETFs.
• The Fed lowers interest rates in December but downplays more rate.cuts

Downside Risks: Monetary Policy, Legislation, MSCI, and Spot ETFs in Focus

Yen carry trade unwind risks, modest inflows into XRP-spot ETF, legislative roadblocks, and the potential delisting of DATs support the bearish short-term outlook.

Another potential headwind would be the OCC rejecting Ripple’s application for a US-chartered banking license.

In my view, XRP is likely to break below $2.0, exposing the November low of $1.8239 if these scenarios unfold. Given the risk of a sharper price drop, a $1.8239 stop-loss would be appropriate for traders carrying long positions.

Outlook Brighter for the Bulls

Key upside risks include:

• BlackRock launches an iShares XRP Trust, signaling strong institutional demand.
• The Fed cuts rates in December and signals further rate cuts in Q1 2026.
• MSCI continues to list DATs.
• The Senate passes the Market Structure bill.
• Blue-chip companies acquire XRP for treasury reserve purposes.

These events are likely to send XRP to new highs. A break above the July $3.66 ATH would send the token toward $5.

In summary, the short-term outlook remains bearish while the medium- to longer-term outlook is constructive.

Financial Analysis

Technical Outlook: EMAs Signal Caution

XRP fell 2.08% on Sunday, November 30, reversing the previous day’s 0.91% to close at $2.1557. The token saw heavier losses than the broader market, which declined 0.48%.

Following Sunday’s loss, XRP pulled back from the 50-day and 200-day Exponential Moving Averages (EMAs), reaffirming a bearish bias.

Key technical levels to watch include:

• Support levels: $2, $1.9112, and $1.8239
• 50-day EMA resistance: $2.3383.
• 200-day EMA resistance: $2.5071.
• Resistance levels: $2.2, $2.35, $2.5, $2.62, $2.8, $3.0, and $3.66.

Fundamental Indicators: Corporate Signals, Policy Decisions

Near-term price drivers include:

• XRP-spot ETF daily inflows.
• Blue-chip companies’ positions on XRP as a treasury reserve asset.
• Regulatory milestones: Ripple’s application for a US-chartered bank license, the progress of the Market Structure Bill on Capitol Hill.
• MSCI’s view on DATs.
• The Fed and the BoJ’s rate paths.

Bearish Scenario: What Happens if $2.0 Breaks?

• XRP-spot ETFs report net outflows.
• The US Senate stalls crypto-friendly legislation, including the Market Structure Bill.
• MSCI delists DATs.
• Blue-chip companies dismiss XRP as a treasury reserve asset.
• OCC delays or rejects Ripple’s US-chartered bank license.
• US economic data and the Fed curb bets on a December Fed rate cut.

These bearish scenarios could send XRP below the $2.0 psychological support level. A drop below $2.0 would expose the $1.9112 support level. If breached, the lower trendline and the November 21 low of $1.8239 would be the next key support levels.

Outlook: $2.0 Support Key for Bullish Medium-Term Path

XRP faces a pivotal week as risks of a yen carry trade collide with weakening institutional demand for crypto-spot ETFs. Legislative developments on Capitol Hill, US economic data, the Fed, and the BoJ will influence sentiment.

Narrowing US-Japan rate differentials and a stalled Market Structure Bill will likely weaken sentiment, potentially sending XRP toward $1.9112.