XRP’s Short-Term $1 Support Crucial… Could Surge to $5 If Clarity Act Passes?

▲ XRP (XRP) / ChatGPT-generated image

XRP (XRP), backed by the dual tailwinds of strong spot exchange-traded fund (ETF) inflows and the passage of supportive legislation, is drawing market attention amid optimistic projections that it could overcome short-term weakness and climb to as high as the $3 level in the mid to long term.

According to investment outlet FXEmpire on February 22 (local time), XRP is currently trading below the key resistance level of $1.5. However, it has demonstrated solid fundamentals by recording three consecutive weeks of net inflows in the spot ETF market, an indicator of institutional demand. Last week alone, U.S. spot XRP ETFs saw inflows of $1.84 million, bringing total net inflows since their launch in November last year to $1.23 billion. This stands in stark contrast to spot Bitcoin (BTC) ETFs, which have experienced more than $300 million in net outflows.

The most powerful catalyst for price appreciation is the U.S. cryptocurrency market structure bill, known as the Clarity Act, which is likely to pass the U.S. Senate this spring. Ripple CEO Brad Garlinghouse expressed 90% confidence in the bill’s passage. As tensions between traditional finance and decentralized finance over stablecoin revenue generation show signs of easing, expectations are growing that XRP adoption and real-world utility will increase explosively.

Experts are weighing these positive factors in favor of XRP’s mid- to long-term bullish scenario. Although a cautious bearish structure remains valid in the short term, with the possibility of a pullback toward the $1 level, analysts predict that a firm breakout above the $1.5 resistance and the 50-day exponential moving average (EMA) could drive XRP to $2.5 within four to eight weeks and to $3 within eight to twelve weeks. In the long term, projections extend beyond its all-time high of $3.66 to as much as $5.

However, macroeconomic risks that could threaten the rally still persist. A potential geopolitical clash between the United States and Iran, delays in interest rate cuts by the Federal Reserve, and the possibility of an unwind in the yen carry trade triggered by hawkish moves from the Bank of Japan are cited as key variables that could drain market liquidity and push XRP below the short-term support level of $1.

Ultimately, XRP’s fate depends on whether it can withstand volatile macroeconomic headwinds and successfully reclaim the $1.5 level. Rather than reacting to short-term downside pressure on charts, investors are advised to take a cautious approach while closely monitoring ongoing spot ETF inflow trends that are attracting substantial institutional capital and regulatory developments emerging from Washington.

Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses resulting from reliance on this content. The information provided should be interpreted for informational purposes only.