XRP Weakness Despite Ripple's MiCA Approval…Why Did the Market Not React?

▲ XRP (Ripple) ©

XRP (Ripple) continues to show weakness around $1.13, failing to improve investor sentiment despite securing important regulatory approval for European market expansion. An analysis suggests that short-term rebound expectations are limited due to slowing retail investor demand and decreasing open interest.

According to investment media FXStreet on July 7 (local time), XRP continued its downtrend, trading around $1.13. The media analyzed that the overall bearish trend persists as retail investor interest wanes, a clear bullish catalyst is lacking, and investors prefer short-term profit-taking.

Ripple announced on the 7th that it has obtained a Crypto-Asset Service Provider (CASP) license from the Luxembourg financial regulator (CSSF). This approval, following preliminary approval in June, signifies full compliance with Europe's MiCA (Markets in Crypto-Assets) regulation, rather than the US crypto market structure bill, the CLARITY Act. As a result, Ripple can expand its compliant crypto payment services to financial institutions and businesses in 30 countries within the European Economic Area (EEA). Cassie Craddock, Ripple's UK & Europe Managing Director, stated, "With this CASP authorization, Ripple is now ready to expand its business in full regulatory compliance under the MiCA regime."

However, market reaction to the regulatory positive news was limited. According to CoinGlass data, XRP perpetual futures open interest was recorded at $2.38 billion on the 7th. This is a decrease from $2.39 billion the previous day and $2.58 billion last Sunday. The media diagnosed that current retail investor participation has significantly decreased compared to the $10.94 billion recorded on July 22 last year, and if this trend continues, the possibility of a short-term recovery could be limited.

Technically, XRP is moving within a descending parallel channel, maintaining a short-term bearish trend. The price remains below the 50-day, 100-day, and 200-day Exponential Moving Averages (EMA), limiting upward movement. The Relative Strength Index (RSI) has fallen to the mid-40s, indicating weakening bullish momentum after the recent rebound. The Moving Average Convergence Divergence (MACD) also remains in positive territory, but its histogram is gradually flattening, suggesting a slowdown in the upward trend. On the other hand, the Parabolic SAR is located at $1.02, providing a short-term support signal, the media explained.

The media presented the upper resistance lines as the top of the descending channel at $1.17 and the 50-day EMA at $1.18. Subsequently, the 100-day EMA at $1.28 and the 200-day EMA at $1.50 could act as additional resistance levels. Conversely, if the price falls, the current price range is the primary support level, followed by $1.02 where the Parabolic SAR is located, and then the bottom of the descending channel at $0.84 could be the next major support zone, the analysis suggested.

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