XRP Falters as Spot ETF Delays Hit Sentiment
XRP declined 0.05% Saturday, August 30, following Friday’s 4.99% tumble, closing at a four-week low of $2.8192. The token underperformed the broader market, which rose 0.38%, lifting the total crypto market cap to $3.73 trillion. Notably, XRP extended its losing streak to four sessions.
The absence of an established spot-ETF market and weak institutional demand weighed on sentiment. Currently, eight pure XRP-focused spot ETFs are awaiting SEC approval despite the SEC vs. Ripple case establishing the token as a non-security in secondary trading.
Institutional Demand Fails to Trigger an XRP Rally
The absence of an XRP-spot ETF market leaves XRP exposed to institutional demand through treasury reserve assets. However, unlike BTC, XRP has seen no institutional demand from mainstream blue-chip firms. Currently, smaller, less influential firms have expressed interest in XRP as a treasury reserve asset.
Pro-crypto lawyer Bill Morgan remarked on a US company announcing plans to acquire XRP as a treasury reserve asset, stating:
“An SEC filing today shows Hyperscale Data Inc. is establishing an equity offering program for sale of its common stock up to $125 million and part of the funds from the offering will be used to acquire Bitcoin and XRP.”
The news failed to send XRP higher, raising questions about the significance of increased demand for the token as a treasury reserve asset.
However, former SEC lawyer Marc Fagel explained:
“This is a penny stock company with large losses and a going concern disclosure from its auditors… and they’re going to raise money to be crypto? Not sure these are a great reflection on XRP.”
Furthermore, a $125 million purchase of BTC and XRP is unlikely to affect the respective supply-demand balances. However, a sizeable purchase from a blue-chip company could change the narrative. For context, BTC soared 19.5% on February 8, 2021, after Tesla (TSLA) announced the purchase of $1.5 billion worth of BTC.
Given that blue-chip firms have shown little interest in XRP as a treasury reserve asset, approval of XRP-spot ETFs is crucial. Delays to the approval and launches of XRP-spot ETFs may leave the token in limbo unless the regulatory landscape shifts further.
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See all Bitcoin forecastsXRP Price Outlook: ETF Developments Key
The near-term XRP price outlook hinges on several key events. These include:
- Spot ETF developments: BlackRock filing and approvals.
- Ripple’s US-Chartered bank license decision.
- SWIFT-related developments.
- Legislative news from Capitol Hill.
XRP Price Action:
Looking at the daily chart, XRP trades below the 50-day Exponential Moving Average (EMA), while holding above the 200-day EMA. The EMAs indicate a bearish near-term but bullish longer-term bias.
- On the upside, a breakout above the 50-day EMA would open the door to testing resistance at the crucial $3 level. A sustained move through $3 could bring $3.2 into play.
- On the downside, a drop below the August 30 low of $2.7635 may enable the bears to target the 200-day EMA and the $2.5 support level.
Broader Market Outlook
XRP-spot ETF developments remain crucial for the supply-demand balance. However, the token remains exposed to external market forces.
Broader macroeconomic headwinds—such as Fed monetary policy signals—may continue to influence sentiment. If US data remain upbeat and Fed guidance is dovish, risk assets could benefit. Conversely, rising stagflation fears may weigh on cryptos.
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