XRP News Today: XRP Eyes $2.0 Pivot After BoJ Rate Decision

The Bank of Japan delivered a masterclass on raising rates without market disruption, triggering an XRP rally.

On Friday, December 19, the BoJ hiked rates by 25 basis points to 0.75%, but signaled a continuation of loose monetary policy, delivering market relief. In the lead-up to the decision, market fears of a yen carry trade unwind had dragged XRP to a Friday session low of $1.7716 before a BoJ-induced rebound to $1.9.

USD/JPY rallied 1.45% to close the Friday session at 157.703 in response to the decision. The weaker yen boosted carry trades into risk assets such as XRP.

The BoJ monetary policy decision coincided with positive updates from Capitol Hill on crypto-friendly legislation and increasing demand for XRP-spot ETFs. The dovish BoJ policy outlook, strong demand for XRP-spot ETFs, and progress toward crypto legislation support a bullish price trajectory.

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

Bank of Japan Raises Interest Rates and Lifts Sentiment

The BoJ edged closer to monetary policy normalization on Friday, December 19, raising interest rates by 25 basis points. However, the Statement of Monetary Policy and BoJ Governor Ueda emphasized that monetary policy will remain accommodating, easing concerns over aggressive rate hikes through 2026.

Furthermore, there were no announcements on the BoJ’s neutral rate, currently in a 1% to 2.5% range. BoJ Governor Ueda noted that interest rates remained well below the lower end of the neutral range despite the rate hike, reportedly stating:

“Even after raising rates to 0.75%, there’s some distance to the bottom of our estimated range of neutral.”

The neutral rate is the BoJ’s target for policy normalization, where interest rates are neither accommodative nor restrictive.

XRP immediately responded to the BoJ’s interest rate decision and Statement of Monetary Policy, reflecting market relief. The token jumped from the session low of $1.7716 to a high of $1.9212 before easing back.

Notably, investors focused more on USD/JPY trends than 10-year Japanese Government Bond (JGB) yields, which soared to a session high of 2.039%. 10-year JGB yields reflected the BoJ’s rate hike and plans to continue raising interest rates, albeit gradually.

Since October, JGB yields – XRPUSD had formed an inverse relationship before breaking on Friday. The inverse correlation underscored market concerns about a yen carry trade unwind.

Friday’s price action signaled a shift in sentiment, supporting a bullish short- and medium-term price outlook for XRP.

US XRP-Spot ETF Market Extends Inflow Streak

While the BoJ monetary policy decision was the main event, XRP-spot ETF flows continued to reflect robust institutional demand. The US XRP-spot ETF market reported net inflows of $13.21 million on Friday, December 19, following the previous day’s inflows of $30.41 million.

Crucially, the XRP-spot ETF market extended its inflow streak to 24 consecutive days and logged total net inflows since launch of $1.07 billion.

Market jitters about the BoJ’s December rate hike, a yen carry trade unwind, and delays to the Market Structure Bill have overshadowed the performance of the XRP-spot ETF market. Strong institutional demand for spot ETFs set the stage for a recovery of XRP’s post-launch losses.

Since the Canary XRP ETF launched on November 14, XRP had plunged 23.6% to Friday’s low of $1.7716 before the recovery. A full reversal would bring the $2.3 handle into play, aligning with a medium-term (4-8 weeks) price target of $2.5.

Medium- and Long-Term Outlook Remains Constructive

A dovish BoJ rate hike, robust demand for XRP-spot ETFs, and updates from Capitol Hill on crypto legislation support a bullish price outlook.

In the near term, the BoJ and Fed will continue to influence market sentiment. The threat of a higher BoJ neutral rate lingers, while uncertainty remains over a March Fed rate cut.

Considering the current market dynamics, the short-term (1-4 weeks) outlook has turned bullish. The medium-term (4-8 weeks) and longer-term (8-12 weeks) outlooks remain bullish, with price targets of $2.5 and $3.0, respectively.

Downside Risks to the Bullish Scenario

Several events could derail the bullish outlooks. These include:

• The Bank of Japan announces a neutral rate between 1.5% and 2.5% and the need to accelerate a move toward policy normalization.
• US economic data and FOMC members support a hawkish Fed policy stance.
• The MSCI delists digital asset treasury companies (DATs). Delistings would likely reduce interest in XRP as a treasury reserve asset.
• US Senate opposes the Market Structure Bill.
• XRP-spot ETFs report outflows.

These scenarios would likely send XRP toward $1.75, affirming a bearish trend reversal.

Nevertheless, demand for XRP-spot ETFs, increased XRP utility, and the passing of crypto-friendly legislation support a longer-term move to $3.0.

In summary, the short-term outlook turned cautiously bullish as fundamentals decoupled from the bearish technicals. Meanwhile, the medium- to longer-term outlooks are constructive.

Financial Analysis

Technical Outlook: EMAs Signal Caution

XRP jumped 5.6% on Friday, December 19, reversing the previous day’s 2.97% loss, closing at $1.9090. The token outperformed the broader crypto market, which gained 3.52%.

Despite Friday’s rally, XRP remained well below the 50-day and 200-day Exponential Moving Averages (EMAs), signaling a bearish bias. While the technicals remain bearish, fundamentals are increasingly outweighing the technical structure.

Key technical levels to watch include:

• Support levels: $1.75, and then $1.50.
• 50-day EMA resistance: $2.1509.
• 200-day EMA resistance: $2.4194.
• Resistance levels: $2, $2.5, $3.0, and $3.66.

Looking at the daily chart, a break above the $2 psychological level would pave the way toward the 50-day EMA. A sustained move through the 50-day EMA would signal a near-term bullish trend reversal, supporting a move toward the 200-day EMA and the $2.5 resistance level. A breakout above the EMAs would affirm the medium-term outlook, and the longer-term (8-12 weeks) $3.0 price target.

Fundamental Indicators: BoJ, Fed, and ETF Demand

Near-term price drivers include:

• XRP-spot ETF flow trends.
• US economic data and March Fed rate cut bets.
• The BoJ’s neutral interest rate.

Bearish Structure: What Happens if XRP Reclaims $2.0?

A break above $2.0 would bring the upper trendline into play. A sustained move through the upper trendline would indicate a bullish trend reversal. A bullish trend reversal would support the medium-term (4–8 weeks) target of $2.5 and longer-term (8–12 weeks) target of $3.0.

However, rejection at the $2.0 psychological level and a drop below the lower trendline would invalidate the bullish medium-term outlook and affirm the bearish structure.

Outlook: $2.0 Remains the Pivot Level

Looking ahead, XRP-spot ETF flows will influence near-term trends as the BoJ wrapped up the final monetary policy decision of the year.

XRP-spot ETF inflows, hopes for crypto-friendly legislation, and continued central bank policy support set the stage for a bullish year-end.

To summarize, strong institutional demand for XRP-spot ETFs and the Market Structure Bill’s progress support a medium-term (4–8 weeks) move to $2.5. A March Fed rate cut and the Senate passing the Market Structure Bill would reinforce the longer-term (8–12 weeks) price target of $3.0.

Over the 6-12 month price horizon, a breakout above the all-time high $3.66 would bring $5 into play.