Two Key Factors Hint at a Possible Drop in XRP Price
CME’s denial of XRP futures undermines earlier optimism, while indicators signal a potential downturn.
Key Insights:
- The Chicago Mercantile Exchange’s (CME) denial of plans for XRP futures suggests a lack of institutional interest in cryptocurrencies beyond Bitcoin and Ethereum.
- XRP’s price had rallied due to expectations surrounding possible mainstream acceptance during Trump’s presidency.
- Technical analysis reveals signs of declining momentum for XRP.
The outlook for XRP, a cryptocurrency focused on payments, looks uncertain as major financial institutions appear disinterested in tokens outside of Bitcoin and Ethereum. This skepticism is reflected in the CME’s recent rejection of proposed futures for XRP and Solana’s SOL, suggesting that institutions may be hesitant due to potential regulatory challenges.
This swift decision from the CME raises concerns for XRP, as it contradicts the optimism fueled by a recent meeting between Ripple’s CEO Brad Garlinghouse and Donald Trump, which had led to a surge in XRP’s price to around $3.4 earlier this month. Analysts perceived this encounter as a favorable indicator for XRP’s future.
Signs of Fatigue
As XRP approached record highs last week, the Mayer Multiple, a metric comparing current price to its 200-day moving average, lacked the upward momentum needed to break previous peaks, indicating bearish divergence. This trend signals a weakening bullish momentum and raises the likelihood of a price drop. Moreover, the MACD histogram, which helps gauge trend strength, indicates lower highs above the zero line, further supporting this bearish sentiment.
Currently, XRP trades at $3.05, reflecting a 4% drop over the past 24 hours, according to CoinDesk data. Given the volatile nature of altcoins, a Bitcoin rally could potentially lift XRP beyond its recent peak, challenging these bearish technical signals.