What to Know:
- XRP failed to hold above the $2 psychological level despite easing global risk concerns, with momentum indicators continuing to favor sellers and prompting profit-taking after earlier gains.
- US XRP-spot ETFs posted $82.04 million in net inflows for the week ending December 19, the lowest since launch.
- Macro shifts like Bank of Japan rate hike and rising expectations of a March Fed rate cut offer support, but policy risks remain.
Ripple ($XRP) remained under pressure over the weekend, still trading below the $2 psychological threshold as December drew to a close. The crypto struggled to regain upward momentum even with some supportive macroeconomic developments. Technical indicators continued to point to weakness, and encouraged profit-taking after recent rallies tied to broader market news.
XRP Below $2: Factors and Implications
XRP is currently trading at $1.92, which was just below the $2 level, a mark that it hit temporarily on 15 December. While longer-term fundamentals have shown signs of improvement, short-term sentiment remained weak. Momentum signals showed that the sellers still maintained the upper hand, even as volatility moderated from earlier in the month. A momentous development last week was in Japan. The Bank of Japan issued a rate hike that the market broadly interpreted as dovish. The action reduced demand for the yen and also removed concerns about any quick unravelling of the yen carry trade. Currency markets responded quickly. The dollar sharply strengthened against the yen, stabilizing risk sentiment throughout the global market.
At the same time, institutional appetite for XRP-linked investment products weakened. Data from the US XRP-spot ETF market showed net inflows of $13.21 million on Friday, December 19. For the full reporting week ending December 19, total inflows reached $82.04 million. This marked the lowest weekly figure since the products launched in November.
In spite of the slowdown, XRP-spot ETFs have maintained a consistent inflow streak. The market has now recorded 25 consecutive days of net inflows, with cumulative inflows totaling $1.07 billion. Still, the pace remains modest when compared with Bitcoin-linked products. Over the same initial trading window, US BTC-spot ETFs attracted $4.85 billion.
Structural differences across the ETF landscape remain a factor. XRP currently has five spot ETFs listed in the US, while Bitcoin has 11. None of the XRP products are backed by a top-tier issuer by assets under management. The absence of a BlackRock-backed XRP ETF continues to shape market dynamics.
BlackRock’s influence in the Bitcoin ETF space has been substantial. Its iShares Bitcoin Trust has reported $62.5 billion in net inflows since launch, far outpacing peers. Fidelity’s Wise Origin Bitcoin Fund has attracted $12.2 billion, while Grayscale’s Bitcoin Trust has seen $25.1 billion in net outflows. Even with those outflows, total net inflows into US BTC-spot ETFs stand at $57.4 billion, underscoring the scale advantage driven by large issuers.
Broader macro and policy developments have also weighed on crypto demand. Uncertainty around a potential US government shutdown and delays in crypto-related legislation have dampened institutional positioning. A firmer Federal Reserve stance earlier in the quarter and speculation around Japanese monetary tightening further pressured risk assets.
Recent data, however, has shifted expectations. Softer US inflation readings and signs of cooling in the labor market have raised the probability of a March rate cut by the Federal Reserve. CME FedWatch data showed the odds rising to 56.3% by December 19, up from 47 percent a month earlier.
The Bank of Japan’s latest move added another layer. While the yen weakened sharply, Japanese government bond yields climbed above 2 percent for the first time since 2006. The currency reaction played a role in improving global sentiment and helped loosen XRP’s earlier inverse relationship with Japanese bond yields.
Looking ahead, legislative developments in Washington remain a central focus. Progress on the Market Structure Bill appears to offer potential to spark progress even after recent delays. And in particular, XRP jumped nearly 15% earlier this year in one session after a major vote in the House of Representatives. Market analysts view a cautiously constructive setup. The 50-day moving average would be brought into view after a sustained break above $2, and resistance approached around $2.5. If the current levels are not held, though, XRP could be put at risk of a pullback toward $1.75, especially if ETF outflows materialize or rate-cut expectations slip away.
Also Read: XRP Price Weakness Persists as Selling Pressure Begins to Ease
