XRP News Today: XRP Weakens on BoJ Rate Outlook and Bill Delays

XRP slid to its lowest level since November 21 on Monday, December 15. Sellers outpaced dip buyers amid concerns about a potential yen carry trade unwind. Economists expect the Bank of Japan to raise interest rates by 25 basis points on Friday, December 19.

10-year Japanese Government Bond (JGB) yields edged toward last week’s 18-year high on Monday, weighing on sentiment. XRP and 10-year JGBs yields have an inverse correlation, reflecting the influence of BoJ monetary policy on the crypto market.

Reports of delays to the Market Structure Bill markup added to the negative sentiment.

Monday’s drop below $1.9 signaled a short-term bearish trend reversal. Meanwhile, the medium- and longer-term outlooks remain bullish.

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.

JGB Yields Climb, Sending XRP and the Broader Market into the Red

10-year JGB yields climbed toward last week’s high of 1.981% and the 2% level, considered a line in the sand for yen carry trades. A 25-basis-point BoJ rate hike would follow the Fed’s 25-basis-point rate cut. A narrowing rate differential would make yen carry trades into US assets less profitable. Typically, waning profits  lead to the repayment of Japanese yen-denominated loans, which would dry up market liquidity.

The prospect of the BoJ declaring its neutral interest rate has also fueled concerns about a yen carry trade unwind. The higher the neutral rate, the more BoJ rate hikes, and the narrower the US-Japan rate differential, further impacting risk assets. The neutral rate is where monetary policy is neither accommodative nor restrictive.

Given the uncertainty about the BoJ’s policy outlook, BoJ Governor Ueda’s press conference could be crucial for XRP’s near-term price outlook. A 1% to 1.25% neutral rate would likely ease yen carry trade unwind fears and boost XRP demand. On the other hand, a 1.5% to 2% neutral rate may trigger an unwind, adversely impacting sentiment.

For context, the BoJ cut JGB purchases and raised interest rates on July 31, 2024. The monetary policy decision led to a sell-off of risk assets. XRP tumbled from $0.6591 on July 31, 2024, to $0.4320 on August 5, 2024, a 34.5% loss.

In mid-2024, XRP rebounded swiftly, with the US Presidential Election and the SEC vs. Ripple case drawing dip buyers. Fast forward to late 2025, and rate differentials will be the focal point, alongside legislative developments and spot ETF flows.

Given the market jitters over the BoJ’s monetary policy decision, 10-year JGB yields will require close monitoring.

Market Structure Bill Markup Pushed Back

Increasing fears over a yen carry trade unwind collided with delays to the Market Structure Bill markup. Bipartisan meetings on the Market Structure Bill failed to yield a markup, leaving US crypto legislation on ice.

Crypto in America host Eleanor Terrett quoted a Senate Banking Committee spokesperson, who reportedly stated:

“Chairman Scott and the Senate Banking Committee have made strong progress with Democratic counterparts on bipartisan digital asset market structure legislation. From the outset, Chairman Scott has been clear that this effort should be bipartisan. […]. The Committee is continuing to negotiate and looks forward to a markup in early 2026.”

This week marks the final legislative week of the calendar year, with Senate members expected to leave as early as Wednesday for the holidays. The Senate Agricultural Committee also ran out of time to schedule a markup, ending hopes of crypto legislation being in place by year-end.

Analysts had expected a Market Structure Bill markup as early as this week, setting the stage for a Senate vote in Q1 2026. The absence of crypto legislation leaves the door closed on investors looking for protection from regulatory oversight.

XRP remains highly sensitive to legislative developments, given the lengthy legal battle with the SEC. On July 17, XRP soared 14.69% in response to the US House of Representatives passing the Market Structure Bill to the Senate.

Bullish Medium-Term Outlook Faces Headwinds

The delay to the Market Structure Bill markup exposes XRP to the US economic calendar and the BoJ’s upcoming monetary policy decision.

The US jobs and CPI reports, out on Tuesday, December 16, and Thursday, December 18, will fuel speculation about a Q1 2026 Fed rate cut. A cooling US labor market and softer inflation would raise bets on a March Fed rate cut and boost sentiment.

According to the CME FedWatch Tool, the probability of a March Fed rate cut increased from 49.5% on December 12 to 51.7% on December 15.

However, the BoJ’s interest rate decision and forward guidance will be key for near-term price trends.

In my view, the current market dynamics expose XRP to a cautiously bearish short-term (1-4 weeks) outlook, exposing the November 21 low of $1.8239. However, robust XRP-spot ETF inflows, the likelihood of crypto-friendly legislation, and increased XRP utility support a bullish medium-term (4-8 weeks) climb to $2.35. A return to $2.35 would align with a longer-term (8-12 weeks) $2.5 plus price target.

Downside Risks to Bullish Medium-Term Outlook

While the medium-term outlook remains bullish, several scenarios could derail it. These include:

• The Bank of Japan raises interest rates and indicates multiple rate hikes.
• US jobs and inflation data signal a more hawkish Fed rate path.
• The MSCI delists digital asset treasury companies (DATs). Delistings would likely reduce interest in XRP as a treasury reserve asset.
• US Senate challenges the Market Structure Bill.
• XRP-spot ETFs report outflows.

These events would likely drag XRP toward the November low of $1.82, supporting the bearish short-term outlook.

However, in my opinion, robust XRP-spot ETF inflows, a widening investor base, and progress toward crypto-friendly legislation support a longer-term move toward $3.

In summary, the short-term outlook remains cautiously bearish as fundamentals and the technicals align. Meanwhile, the medium- to longer-term outlooks are constructive.

Financial Analysis

Technical Outlook: EMAs Signal Caution

XRP slid 3.95% on Monday, December 15, following the previous day’s 2.28% loss, closing at $1.8993. The token saw heavier losses than the broader crypto market, which declined 1.98%.

Monday’s sell-off left XRP below the 50-day and 200-day Exponential Moving Averages (EMAs), signaling a bearish bias.

Key technical levels to watch include:

• Support levels: $1.8239 and then, $1.75.
• 50-day EMA resistance: $2.1974.
• 200-day EMA resistance: $2.4413.
• Resistance levels: $1.9112, $2, $2.2, $2.35, $2.5, $2.62, $2.8, $3.0, and $3.66.

Looking at the daily chart, a drop below $1.8 would expose the $1.75 support level, reinforcing the bearish short-term outlook. However, a break above the $1.9112 resistance level would support a move to the $2 psychological level. A sustained move through $2.0 would bring the 50-day EMA and the $2.2 resistance level.

Significantly, a sustained break above the 50-day EMA would signal a bullish trend reversal. A bullish trend reversal would indicate a medium-term (4-8 weeks) rise toward the 200-day EMA and the $2.5 level.

Fundamental Indicators: Corporate Interest, ETF Demand, and Legislation

Near-term price drivers include:

• XRP-spot ETF flows.
• Blue-chip companies’ views on XRP as a treasury reserve asset.
• Crypto-related legislative developments on Capitol Hill.
• MSCI’s decision on DAT listings.
• US economic data and expectations of a March Fed rate cut.
• The BoJ’s interest rate decisions and forward guidance.

Bullish Structure: What Happens if XRP Reclaims $2.0?

Failure to break above the $1.9112 resistance level would expose the $1.75 support level and the lower trendline. A sustained fall through the lower trendline would affirm the bearish trend reversal.

However, a break above the $1.9112 resistance level would enable the bulls to target the $2.0 handle. A sustained move through $2.0 would bring the upper trendline into play. A breakout from the upper trendline would reinforce the bullish 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 break below $1.8239 would invalidate the bullish medium-term outlook.

Outlook: Reclaiming $2.0 Key to Short-Term Outlook

In the week ahead, US economic indicators, the BoJ’s forward guidance on monetary policy, and XRP-spot ETF flows will influence near-term trends.

Weaker US labor market data and softer inflation, coupled with strong XRP-spot ETF inflows, are likely to cushion the effects of a hawkish BoJ.

To summarize, a hawkish BoJ rate hike would support a near-term fall toward the November 21 low of $1.8239. A drop below $1.8239 would affirm the near-term bearish trend reversal.

However, robust demand for XRP-spot ETFs and softer US data support a medium-term (4–8 weeks) move to $2.35. Increased XRP utility and the Senate passing the Market Structure Bill would reinforce the longer-term (8–12 weeks) target of $2.5. Reclaiming $2.5 would bring $3.0 into sight.