Will XRP Hit $3 If the Clarity Act Passes?

▲ XRP (XRP) / ChatGPT-generated image ©

XRP (XRP, Ripple) has rebounded on expectations that the U.S. Senate will pass the “U.S. Cryptocurrency Market Structure Bill,” known as the CLARITY Act, but warnings persist that its short-term bearish structure remains intact.

On February 21 (local time), investment outlet FXEmpire reported that XRP snapped a three-session losing streak and moved higher. The token had previously fallen to as low as $1.3780 amid stronger-than-expected U.S. Core Personal Consumption Expenditures (PCE) inflation data and reduced expectations for a Federal Reserve rate cut in June. However, optimism that the Senate will pass the market structure bill before summer spurred buying interest. In particular, recovering demand for a U.S. spot XRP ETF supported investor sentiment.

Macroeconomic indicators presented a mixed picture. December Core PCE inflation rose 3.0% year-over-year, exceeding November’s 2.8%, while personal income increased 0.3% month-over-month and personal spending climbed 0.4%. The S&P Global Services PMI eased from 52.7 to 52.3, but rising input and output price pressures heightened concerns about renewed inflation. According to CME FedWatch, the probability of a June rate cut fell from 58.6% to 51.4% in just one day.

Meanwhile, expectations of regulatory improvements supported the medium-term outlook. Ripple CEO Brad Garlinghouse estimated a 90% probability that the CLARITY Act would pass by April. The White House has set March 1 as the deadline for reaching an agreement. The market also recalls that XRP surged 14.69% on July 17 last year immediately after the U.S. House passed the bill to the Senate. Expanding XRP utility and solid inflows into U.S. spot XRP ETFs further underpin price targets of $2.50 within 4–8 weeks and $3.00 within 8–12 weeks.

However, caution dominates the short-term (1–4 week) outlook. XRP has declined 13.5% in February and remains below its 50-day and 200-day exponential moving averages (EMAs). Although it rebounded 1.57% to close at $1.4290 on February 20, it is still down 3.46% on a weekly basis, maintaining a bearish structure. Key support levels are $1.1227 and $1.00, while resistance stands at $1.50 and $2.00. A recovery above $1.50 could open the way to retest the 50-day EMA ($1.6782) and the 200-day EMA ($2.1089), but a breakdown below $1.00 would reinforce the short-term bearish scenario.

Several risk factors remain. Geopolitical tensions in the Middle East, the possibility of a U.S.–Iran conflict, delays to the bill in the Senate, a shift to net outflows from spot XRP ETFs, and the potential for the Bank of Japan (BoJ) to raise its neutral rate are all cited as downside risks. Conversely, a dovish Fed stance, gradual monetary policy from the BoJ, legislative progress, and continued ETF inflows could pave the way for a medium-term move to $2.50 and a longer-term retest of $3.00. If XRP surpasses its all-time high of $3.66, a 6–12 month target of $5.00 is also being discussed.

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