XRP News Today: ETF Hopes vs. Fed Risks – Can Bulls Defend $2.7 Support?

XRP Slides as Bitcoin Overshadows XRP-Spot ETF Hype

XRP faced intense selling pressure as market forces sent Bitcoin (BTC) crashing below the crucial $110,000 support level.

BTC is down 4.97% this week as investors brace for the expiry of $23 billion in BTC and ETH options on Friday, September 26.

Why do XRP traders need to worry about BTC and ETH option expiries?

BTC option market makers and whales typically push prices toward the ‘max pain’ level ahead of the expiration date. The ‘max pain’ level is the price point where the largest number of options expire worthless. By pushing BTC below the ‘max pain’ level, options sellers minimize payouts and maximize profits. This is referred to as the Max Pain Theory.

BTC’s dominance influences broader market sentiment and buyer demand for XRP. A BTC sell-off typically triggers an XRP reversal, overshadowing positive developments.

This quarter, upbeat US labor market and GDP data tempered expectations of multiple Fed rate cuts in the fourth quarter, adding to the market angst. Traders locked in profits ahead of today’s US Personal Income and Outlays Report. Hotter inflation could further impact hopes for policy easing in the fourth quarter, weighing on risk assets.

XRP has previously experienced volatility in response to US economic data, Fed forward guidance, and FOMC interest rate decisions. For context, XRP slid 5.01% on Friday, August 29, in response to July’s better-than-expected Personal Income and Outlays Report.

Tailwinds Gather, Signaling an October Rebound

Despite XRP facing selling pressure in late September, upcoming events could set the token up for a bullish fourth quarter.

The launch of XRP-spot ETFs, including a potential iShares XRP Trust, may fuel institutional demand and send XRP to new highs.

Nate Geraci, president at NovaDius Wealth Management, spoke with Robbie Mitchnick, head of digital assets at BlackRock (BLK), about the crypto-spot ETF market.

Mitchnick noted that the biggest factors in deciding on a product launch are the level of investor demand and what problem is BlackRock solving for them, adding:

“So, when we think about other potential opportunities in this space, obviously we’re looking at things like market cap, liquidity, maturity, but also clarity of investment thesis and overall product and portfolio considerations in terms of how clients’ long-term are going to be able to use products in this space, build the type of portfolio exposures holistically that they want. And so, that’s a constant evaluation process. It’s not a fixed point in time thing, but ultimately that’s the kind of process that we employ.”

With XRP being the third largest crypto by market cap and considering the success of iShares Bitcoin Trust (IBIT) and iShares Ethereum Trust (ETHA), an iShares XRP Trust remains a possibility.

ETF Analysts Downplay Chances of an iShares XRP Trust Filing

However, Bloomberg Intelligence Senior ETF Analyst Eric Balchunas downplayed the chances of an iShares XRP Trust filing, stating:

“Given all the other coins about to ETF-ized, it’s notable BlackRock is going another bitcoin product, imo, signifies they are going to build around btc and eth and lay off the rest, at least for now. This makes the horse race for these other coins much more wide open. No Secretariat to contend with.”

BlackRock filed for a Bitcoin Premium Income ETF on Thursday, September 25, established to yield income rather than offer direct exposure to BTC price trends. The filing aligns with Balchunas’s view that BlackRock will focus on BTC and ETH rather than other cryptos.

However, strong demand for XRP-spot ETFs could shift the narrative. Seven XRP-spot ETFs await the SEC’s decision, with final decision deadlines ranging from October 18 and November 14.

Price Action & Technical Analysis: Breach $2.7 or Break $3

XRP slid 6.22% on Thursday, September 25, reversing the previous session’s 3.57% gain to close at $2.7453. The token underperformed the broader market (-4.47%) on its drop toward key support levels. Traders are watching the following technical levels:

• Support: $2.7 and $2.5.
• Resistance: $2.8, $3, $3.2, $3.335, and the all-time high at $3.66.

In the near term, several key events could drive price action:

• US Personal Income and Outlays Report
• XRP ETF demand.
• Spot ETFs: Approval or delays of XRP-spot ETFs and BlackRock’s position on an iShares XRP Trust filing.
• Blue-chip companies’ positions on XRP as a treasury reserve asset.
• Regulatory milestones: Ripple’s US-chartered bank license application, the Market Structure Bill, and SWIFT-related news may also influence sentiment.

Catalysts & Scenarios

The balance of US economic data, ETF flow trends, regulatory developments, and institutional demand could dictate whether XRP breaches lower support levels or breaks above resistance.

Bearish Scenario

• Hotter-than-expected US Core PCE Index data.
• GDLC, BITW, and XRPR ETFs register weak inflows or outflows, and BlackRock stays silent on an iShares XRP Trust filing.
• SEC rejects XRP-spot ETF applications.
• Legislative roadblocks or resistance to crypto-friendly regulations.
• Blue-chip companies dismiss XRP as a treasury reserve asset.
• OCC delays or rejects Ripple’s US-chartered bank license.
• SWIFT retains market share in global remittances, curbing Ripple’s market access.

These bearish events could drag XRP toward $2.7. If breached, $2.5 would be the next key support level.

Bullish Scenario

• Softer US inflation.
• BITW, GDLC, and XRPR register strong inflows.
• BlackRock files for an iShares XRP Trust, and the SEC approves XRP-spot ETFs.
• Blue-chip companies purchase XRP for treasury purposes, and more payment platforms integrate Ripple technology.
• Ripple secures a US-chartered bank license, and the Senate passes the Market Structure Bill.
• SWIFT loses market share of global remittances to Ripple.

These catalysts could send XRP toward $2.8. A break above $2.8 may enable the bulls to target $3. A sustained move through $3 could pave the way toward $3.2.

Conclusion: Will Dip Buyers Return or Await Spot ETF Launches?

Ongoing delays to the Market Structure Bill’s progress in the Senate leave XRP-spot ETF developments in focus. The launch of XRP-spot ETFs could boost demand, potentially driving the token to fresh highs. An application for an iShares XRP Trust could be crucial, given the successes of IBIT and ETHA. Meanwhile, US economic data will influence sentiment.

Analysts will closely monitor how regulatory and economic risks affect XRP’s trajectory in the coming weeks.