Ripple (XRP) takes a direct hit from Clarity Act's failure... Next stop: $1.15 or $1.70?

▲ XRP, bear market/AI generated image ©

XRP (Ripple) plummeted over 8% in a single day due to the failure of the Clarity Act, the U.S. cryptocurrency market structure bill, to pass a Senate vote. However, it barely managed to hold onto its key long-term and short-term moving averages. Amid forecasts that the price could consolidate between $1.25 and $1.40 if market shock subsides, a potential rebound to $1.50-$1.70 has also been suggested, depending on the future recovery of investor sentiment.

According to crypto media outlet Finbold on September 16 (local time), XRP faced selling pressure after the Clarity Act failed to secure the 60 votes needed to proceed in the U.S. Senate. As sell-offs occurred across the broader crypto market, which had hoped for increased regulatory clarity, XRP fell more than 8% in the last 24 hours, trading at $1.29 at the time of writing.

The Clarity Act was pushed to more clearly define the roles of the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) in overseeing digital assets. It was particularly seen as an opportunity to reduce legal uncertainty for XRP, which has long been at the center of the U.S. crypto regulatory debate. However, with the Senate vote failing, related legislation could not advance, leaving the market to rely on existing regulatory guidance and future actions for the time being.

Despite the recent correction, ChatGPT presented a cautiously optimistic outlook for XRP. The base scenario involves stabilization and sideways movement in the $1.25-$1.40 range as the market absorbs the shock of the Clarity Act's failed vote. If investor sentiment improves and the broader crypto market recovers, a rebound to $1.50-$1.70 is possible over the coming months. Conversely, if market sentiment continues to deteriorate, it could retest the $1.15-$1.25 range.

Technically, it's notable that XRP has maintained key moving averages despite the sharp decline. The 50-day Simple Moving Average (SMA) is at $1.23, and the 200-day SMA is at $1.27, with the current price of $1.29 above both indicators. As the 50-day SMA is used to gauge mid-term trends and the 200-day SMA for long-term trends, analysis suggests that XRP's broader uptrend structure remains intact despite recent weakness, as long as it holds these two price levels.

However, short-term selling pressure has increased. The 14-day Relative Strength Index (RSI) is at 45.22, remaining in the neutral zone but indicating strengthened bearish momentum since the Clarity Act's vote failed. Simultaneously, it is well above the oversold threshold of 30, suggesting that selling pressure has not fully dominated the market. Whether XRP can maintain the moving average range of $1.23-$1.27 in the future will be a key criterion for assessing its technical trend.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*