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Here Are Two Reasons Why XRP Price May Slide: Godbole
CME's denial of XRP futures contradicts the optimism seen earlier this month, as technicals point to weakening of the uptrend.
Jan 23, 2025, 1:44 p.m.
What to know:
- CME's denial of XRP futures indicates a lack of institutional demand for coins other than BTC and ETH.
- XRP surged early this month in hopes of mainstream adoption under Trump's presidency.
- Technical studies indicate a weakening of the upward momentum.
Payments-focused cryptocurrency XRP's short-term outlook appears grim as traditional financial giants do not seem interested in looking beyond BTC and ETH, while price action indicates signs of rally fatigue.
On Wednesday, the Chicago Mercantile Exchange (CME) denied its plans to list futures tied to XRP and Solana's SOL token. This swift denial likely indicates that institutions are not ready yet to dabble with tokens other than bitcoin and ether or potential regulatory hurdles. The CME is the preferred venue for institutions to trade futures and options tied to BTC and ETH.
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The CME's denial — at least for now — may be particularly concerning for XRP as it undermines the optimism surrounding XRP's prospects under Donald Trump's presidency. XRP surged to $3.4 early this month after Ripple's CEO Brad Garlinghouse met Trump, spurring hopes for positive developments that could accelerate institutional adoption. Analysts had viewed the meeting as a bullish sign for XRP. Ripple uses XRP primarily as a digital currency to facilitate cross-border payments and remittances.
Rally fatigue
As XRP's price surged close to record highs last week, the Mayer Multiple – which compares the spot price to the 200-day simple moving average – failed to reach new highs and remained below its December peak, indicating a bearish divergence.
This divergence signals a weakening bullish momentum and raises the potential for a price drop. Additionally, the MACD histogram, a tool used to identify trend strength and changes, supports this view by printing lower highs above the zero line.
XRP changed hands at $3.05, representing a 4% drop on a 24-hour basis, according to CoinDesk data. Altcoins, in general, are volatile and tend to follow BTC. So, a rally in BTC could lift XRP above its recent high, invalidating the bearish chart signals.
Read More: Solana, XRP Jump as Trump Reportedly Mulls 'America-First' Strategic Crypto Reserve, but Experts Suggest Otherwise
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What to know:
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