Following Bitcoin’s spot exchange-traded fund (ETF) approval on January 11, market speculation has grown around the possibility of similar investment vehicles for major cryptocurrencies, including a spot XRP ETF. However, certain requirements and regulatory considerations must be met before such a development can occur.

Regulatory Prerequisites For Spot XRP ETF

FOX reporter Eleanor Terret clarifies the matter, stating that launching an XRP spot ETF would first require the establishment of a futures ETF. 

In the case of Bitcoin, the approval of spot ETFs was conditional upon the Securities and Exchange Commission (SEC) concluding that the Chicago Mercantile Exchange (CME) Bitcoin futures market provided sufficient surveillance against fraud and manipulation. 

Terret suggests that for XRP to have a spot ETF, a futures ETF must first be established, marking a step in the right direction.

Bloomberg ETF expert James Seyffart shares a similar sentiment, stating that he does not anticipate an XRP ETF launching this year. Seyffart cites the ongoing SEC case against Ripple as a factor influencing his stance, suggesting that an XRP ETF is more likely to emerge once the regulatory matter is resolved. 

Seyffart adds that XRP futures trading on a regulated platform like the Chicago Mercantile Exchange would be a prerequisite for the SEC to consider any applications for a spot XRP ETF. Seyffart hints that an XRP futures ETF could also be advantageous in this context.

The SEC has maintained a cautious approach towards spot ETFs involving crypto assets due to concerns about potential market manipulation. Seyffart emphasizes that the availability of XRP futures trading on a regulated platform, such as the CME, would provide a favorable framework for the SEC’s consideration of a spot XRP ETF, especially given previous court rulings highlighting the correlation between futures and spot markets.

Amidst the ongoing speculation, blockchain firm Ripple seems to be preparing for potential involvement in the ETF space. 

A recent job advertisement posted on Ripple’s website reveals their search for a Senior Manager in business Development, with a focus on institutional decentralized finance (DeFi). The role includes spearheading cryptocurrency-related ETF initiatives with internal trading teams and relevant partners.

XRP’s Future Potential – From $0.5299 To $27?

Crypto market analyst EGRAG crypto has conducted a comprehensive price analysis of the XRP token. Despite peaking in 2023, when the price reached a high of $0.9376 on July 13, the token has retraced more than 15% since the start of 2024 to a current trading price of $0.5299.

However, according to EGRAG, the 21 Exponential Moving Average (EMA) on the monthly time frame is a significant indicator for assessing XRP’s price movement. 

The analysis focuses on three price levels: $3.5, $6.5, and $27. Based on previous instances (labeled A, B, and C), EGRAG extrapolates potential future price movements using the same percentage increases observed in the past.

The first potential scenario is a significant price surge to $27, representing a massive 4500% increase. This prediction is based on a similar percentage move observed in the past (from previous instance A), seen in the chart above. 

The second scenario suggests a more conservative projection, with XRP potentially experiencing a solid 1000% increase to $6.5. This projection is based on historical patterns observed in previous instance B. 

In the third scenario, EGRAG anticipates a significant 500% rise in XRP’s price, reaching $3.5. Based on previous instance C, this projection indicates a significant upward movement for the token. 

Whether the XRP token can successfully surpass the upper resistance levels that have impeded its rise to the $0.600 mark since late December remains to be seen. 

Additionally, the market eagerly awaits a catalyst that could prompt a breakthrough in XRP’s seven-month downtrend structure, potentially resulting in a price surge above $0.700.

Featured image from Shutterstock, chart from TradingView.com

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In a remarkable turn of events, XRP derivatives trading volume has experienced an astonishing surge of 204% within a mere 24-hour period. This surge coincides with the recent disclosure by Judge Torres regarding the denial of the Securities and Exchange Commission’s (SEC) interlocutory appeal against Ripple Labs. 

Judge’s Ruling Against SEC Boosts XRP Sentiment

According to data from Coinglass, a leading cryptocurrency analytics platform, XRP derivatives trading volume has witnessed an unprecedented spike, reflecting a significant increase in market activity. 

This surge in trading activity suggests a growing interest in XRP among investors eager to capitalize on the recent legal developments surrounding Ripple Labs.

To provide further context, derivatives trading refers to the buying and selling financial instruments that derive value from an underlying asset, such as a stock, bond, commodity, or cryptocurrency. 

These instruments, known as derivatives, include futures contracts, options, swaps, and other financial contracts. Derivatives allow investors to speculate on the underlying asset’s price movements without owning it directly.

A surge in derivatives trading volume can have significant implications for XRP. Firstly, it indicates higher market participation and interest in the cryptocurrency. 

When more investors and traders actively engage with XRP through derivatives, it can lead to increased liquidity and price discovery.

Derivatives trading can also contribute to increased price volatility in XRP. As traders speculate on the future price of XRP through derivatives contracts, it can amplify price swings. 

With higher trading volume, there is a larger number of participants taking positions on XRP’s price movement, which can result in more pronounced price fluctuations.

Furthermore, a surge in derivatives trading volume can reflect growing market sentiment and investor confidence in XRP. When trading activity increases, it suggests a higher level of interest and engagement from market participants. 

With XRP currently trading at $0.5347, the cryptocurrency has experienced a notable 4.3% surge in the past 24 hours. 

The surge in derivatives trading volume further adds to the growing evidence that the token could be on the cusp of a significant breakout if the bullish momentum continues.

Poised For Upward Movement?

Renowned crypto analyst Dark Defender recently highlighted that XRP has exhibited signs of breaking out from its ongoing consolidation phase given the recent win against the SEC.

This occurrence draws parallels to a previous instance on July 13, with the first ruling of Judge Torres, during which the token experienced a remarkable rally of 80%, reaching as high as $0.9343

Drawing insights from this historical precedent, it is plausible to speculate that XRP might be gearing up for another upward movement. Dark Defender emphasizes that traders should keep a close eye on the next Fibonacci level, which is $0.66. 

However, XRP must maintain support above $0.50 to attain this level. This support level is of particular significance as XRP remained relatively stagnant around it for most of September.

Overall, the recent disclosure by Judge Torres, denying the SEC’s appeal, has provided a significant boost to Ripple Labs and its supporters. 

Furthermore, the news has instilled renewed optimism within the XRP community, leading many investors to believe that a total victory for Ripple Labs is now within reach, possibly just months away.

Featured image from Shutterstock, chart from TradingView.com 

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