XRP News Today: BTC Outflows Drag, XRP Holds Firm

Profit-taking sent XRP below $1.40 on Thursday, February 26, as US labor market data cooled bets on a June Fed rate cut.

US jobless claims rose less than expected, weighing on demand for XRP and the broader crypto market.

Meanwhile, Bitcoin (BTC) remained a drag as heavy US BTC-spot ETF outflows weighed on sentiment.

Nevertheless, resilient demand for US XRP-spot ETFs and hopes that the US Senate will pass the Market Structure Bill continued to support the bullish medium-term (4-8 weeks) outlook for XRP, with a price target of $2.0.

Below, I will explore the key drivers behind recent price trends, the medium-term outlook, and the technical levels traders should watch.

XRP Dips on US Labor Market Data and Waning Fed Rate Cut Bets

US initial jobless claims rose from 208k (week ending February 14) to 212k (week ending February 21), coming in below a forecast of 215k.

The resilient jobless claims data followed the US jobs report, which indicated tighter labor market conditions and robust wage growth. A tight labor market and steady wage growth could boost consumer spending. An upswing in consumer spending would likely fuel demand-driven inflation, supporting a more hawkish Fed rate path. Elevated borrowing costs may curb speculative and leveraged positioning in risk assets such as XRP.

The token dropped from $1.4454 to a session low of $1.3862 after the data release.

While the labor market data cooled Fed rate cut bets, US inflation numbers may shift sentiment later on Friday, February 27. Economists forecast producer prices will rise 2.6% year-on-year in January, down from 3.0% in December. Furthermore, economists expect core producer prices to increase 3.0% YoY in January, easing from 3.3% in December.

Softer-than-expected producer prices would likely fuel speculation about a June Fed rate cut, boosting demand for risk assets.

US XRP-Spot ETFs Extend Inflow Streak

While US economic data influenced sentiment, spot ETF flows continued to cushion the downside. On February 26, the US XRP-spot ETF market saw net inflows of $0.5 million, following the previous day’s inflows of $3.09 million.

Robust institutional demand for XRP-spot ETFs underscored optimism that the US Senate will pass crypto-friendly legislation. Importantly, clear rules of the road would likely boost XRP utility, tilting the supply-demand balance firmly in the token’s favor.

Year-to-date flow trends more closely reflect institutional demand relative to investor appetite for BTC-spot ETFs. The US XRP-spot ETF market has seen $70.26 million in net inflows YTD. Meanwhile, the US BTC-spot ETF market has reported net outflows of $2.52 billion YTD, weighing on the broader crypto market.

Importantly, increased XRP utility, resilient demand for XRP-spot ETFs, and the progress of the Market Structure Bill on Capitol Hill could see XRP decouple from BTC. A decoupling would support a constructive medium- to long-term bias.

XRP Price Forecast: Short-, Medium-, and Long-Term Targets

XRP has dropped 14.7% in February, affirming a cautiously bearish short-term outlook (1-4 weeks), with a target price of $1.0.

However, the progress of the Market Structure Bill, XRP-spot ETF flows, and increased XRP utility reinforce the bullish medium- to long-term price projections:

• Medium-term (4-8 weeks): $2.0.
• Longer-term (8-12 weeks): $3.0.

Key Downside Risks to the Bullish Medium-Term Outlook

Several events could challenge the constructive medium-term bias. These include:

• A US-Iran conflict.
• US economic data temper expectations of an H1 2026 Fed rate cut.
• Delays and/or partisan opposition to the Market Structure Bill.
• Extended periods of XRP-spot ETF net outflows.

These events would weigh on XRP, send the token toward $1.0, and reinforce the cautiously bearish short-term outlook.

XRP and Yen Carry Trade Unwinds

Additionally, traders should consider Bank of Japan chatter and USD/JPY trends, given the impact of the mid-2024 yen carry trade unwind on XRP.

However, a hawkish Bank of Japan neutral rate estimate (1.5%-2.5%) would imply multiple rate hikes. Multiple rate hikes would narrow US-Japan rate differentials in favor of the yen. Narrowing rate differentials could trigger another yen carry trade unwind. For context, the BoJ previously announced a wide neutral rate band of 1%-2.5% but stated it would declare a tighter range at a later date.

Historical price action underscores XRP’s sensitivity to the BoJ and USD/JPY trends. The BoJ’s more hawkish-than-expected July 2024 monetary policy decision sent USD/JPY tumbling from 153.889 to 139.576. The sharp drop triggered a yen carry trade unwind, drying up market liquidity. XRP dropped from a July 31, 2024, high of $0.6591 to an August 5, 2024, low of $0.4320.

Technical Analysis: Levels to Watch

XRP fell 2.16% on February 26, partially reversing the previous day’s 6.27% rally to close at $1.4027. The token came under heavier selling pressure than the broader crypto market cap, which dropped 0.85%.

Thursday’s pullback left XRP well below its 50-day and 200-day EMAs. The EMA positions indicated a bearish bias. Meanwhile, the widening gap between the 50-day EMA and the 200-day EMA suggests further price drops. However, several favorable fundamentals continue to counter bearish technicals, supporting the bullish medium-term outlook. Despite these favorable fundamentals, short-term technicals remain bearish.

Key technical levels to watch include:

• Support levels: $1.0, and then $0.7773.
• 50-day EMA resistance: $1.6167.
• 200-day EMA resistance: $2.0670.
• Resistance levels: $1.5, $2.0, $2.5, and $3.0.

On the daily chart, a break above $1.5 would enable the bulls to target the 50-day EMA. A sustained move through the 50-day EMA would indicate a near-term bullish trend reversal. A bullish trend reversal would open the door to testing the 200-day EMA.

A sustained move through the EMAs would affirm a bullish trend reversal and reinforce the medium- to longer-term price targets.

Fundamental Events Driving Near-Term Price Action

Near-term price drivers include:

• XRP-spot ETF flows.
• US economic indicators and the Fed policy stance.
• Crypto-related regulatory developments – the stablecoin yield stalemate.
• BoJ rate hike bets and the Bank of Japan’s neutral rate.
• Increased geopolitical tensions in the Middle East.

Bearish Structure Intact: $1.0 Remains Key Support

February’s sell-off affirmed the existing bearish trend. A drop below the lower trendline would bring the February 6 low of $1.1227 into play. If breached, $1.0 would be the next key support level. A sustained fall through $1.0 would reinforce the cautiously bearish short-term outlook and further validate the bearish structure.

However, reclaiming $1.5 would pave the way toward the upper trendline and $2.0. A sustained move through the upper trendline would invalidate the bearish structure and signal a bullish trend reversal, reaffirming the constructive medium-term bias.

• Short-term (1-4 weeks): $1.0.
• Medium-term (4-8 weeks): $2.0.
• Longer-term (8-12 weeks): target of $3.0.

XRP Outlook: Geopolitics, Crypto Legislation, and ETF Flows in Focus

Looking ahead, news from Capitol Hill on crypto-related regulations will be key for XRP’s price outlook. The progress of the Market Structure Bill would reinforce the bullish medium- to longer-term outlook for XRP.

However, central bank chatter, US economic indicators, US-Iran talks, and XRP-spot ETF flows will also dictate XRP’s price trajectory.

A more dovish Fed and a BoJ neutral rate potentially in the 1%-1.25% range would fuel demand for XRP. Strong inflows into US XRP-spot ETFs and crypto-friendly regulatory legislation would also be tailwinds for XRP.

In summary, these scenarios would support a medium-term (4–8 weeks) move to $2.0. The US Senate passing the Market Structure Bill would reaffirm the longer-term (8-12 weeks) price target of $3.0.

Beyond 12 weeks, these events may send XRP to its all-time high of $3.66 (Binance). A break above $3.66 would support a 6- to 12-month price target of $5.