Ripple Ecosystem is Growing, But Why is the Price Like This! XRP Market Tension Explodes

▲ Ripple (XRP) ©Godasol

As XRP (Ripple) barely held the $1.35 support level, anticipation for the vote on the CLARITY Act, a US cryptocurrency market structure bill, has emerged as a key variable that will determine future price direction. However, analysis suggests that XRP is still trading below major moving averages and has not escaped its short-term bearish trend.

According to the investment media outlet TradingNews on May 20 (local time), XRP moved within the $1.37-$1.40 range during the day, defending the short-term support level of $1.35. Its market capitalization is approximately $85 billion, and it has fallen by about 5% over the past 7 days. The outlet diagnosed that XRP is still under overall market bearish pressure, having fallen about 27% this year and trading below its 200-day Exponential Moving Average (EMA).

Conversely, the Ripple ecosystem itself is rapidly expanding in terms of institutional infrastructure. Tokenized Real-World Assets (RWA) based on the XRP Ledger (XRPL) have surpassed $3 billion, and Ripple has integrated its Prime service with EDX Markets. Furthermore, tokenized US Treasury payments involving Mastercard and JPMorgan were reportedly processed in real-time. The outlet stated, "While the fundamental strength is improving, the price is not reflecting this situation," and assessed that whether XRP leads to an actual increase in demand is a key variable.

Technically, breaking above $1.50 was cited as the most crucial turning point. XRP recently attempted to break through the $1.45-$1.50 range but failed, followed by a sharp decline, and the downward trend has continued since. Currently, both the 50-day EMA and the Ichimoku Kijun-sen are acting as resistance levels, and the Relative Strength Index (RSI) is at 41.8, indicating a bearish trend. The Moving Average Convergence Divergence (MACD) also maintains a bearish signal, and the Bollinger Bands suggest the possibility of increased volatility.

However, XRP spot ETF fund flows remain positive. The cumulative net inflow into US XRP spot ETFs reached $1.39 billion, with an additional approximately $67.6 million flowing in over the past week. However, the outlet noted that about 84% of the total inflow was driven by retail investors. In particular, Goldman Sachs' liquidation of all its $154 million XRP ETF positions held in the first quarter of this year was cited as an example of dampened institutional investor sentiment.

The outlet views the CLARITY Act vote as the biggest catalyst to determine XRP's future direction. If the bill passes, institutional investment risk would be mitigated, potentially opening the door for a rise to $2 after breaking above $1.50. Conversely, if $1.22 breaks, a further decline to $1 cannot be ruled out. TradingNews analyzed, "While the XRP network itself is expanding, the market is not yet reflecting this in the price," adding, "Ultimately, regulation and the macroeconomic environment will be key factors in breaking the current stalemate."

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