XRP price has lost the momentum it had late last year. Ripple has remained in a wide range between the crucial support at $2 and the resistance point at $3.40 this year. It is not moving in a well-defined trend and has formed the risky head and shoulders chart pattern. This article looks at some of the top catalysts that may affect the XRP price in the near term.
Ripple vs. SEC case
The first major catalyst that may push the XRP price higher is a potential settlement between Ripple Labs and the Securities and Exchange Commission (SEC).
This settlement stems from a case that started in 2020 when the SEC accused Ripple Labs of crimes stemming from it 2013 token sale. The agency sought a $2 billion fine from the company.
In a ruling, a judge said that XRP was not a security, which was a positive thing for Ripple Labs. The judge, however, noted that the capital raise from investors was illegal and fined the company $250 million, which the SEC appealed.
Therefore, there are signs that the SEC, under Donald Trump, will end the lawsuit. Besides, it has already ended lawsuits against other large players in the crypto industry, like Coinbase, Kraken, Gemini, OpenSea, and Uniswap.
The end of this case would be a good thing for XRP price because it would let Ripple Labs do deals with other financial services companies like banks and money transfer firms. Many of these firms have been afraid of dealing with Ripple because of its baggage.
As the weeks and months pass, I increasingly wonder whether despite all the rumours of a settlement, the continuing uncertainty about the end or continuation of SEC v Ripple appeal will eventually increasingly exert a negative pressure on XRP price.
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Ripple is aiming to be a viable SWIFT rival
The end of the suit would also help the company achieve its goal of being a viable rival to SWIFT, the society that connects banks globally. SWIFT’s messaging platform handles over $150 trillion a day.
Ripple sees an opportunity to create a unique system that handles payments either directly or using the XRP token.
Banks will likely prefer Ripple because it is a faster payment method, does not require cash movement, and is cheaper. A Ripple transaction costs less than $5, while SWIFT costs over $50, depending on the amount.
XRP ETF odds
The other catalyst for the XRP ETF is that the odds of a spot ETF approval by the Securities and Exchange Commission (SEC) have risen in the past few months.
Polymarket data shows that participants have an 80% chance of the approval of funds by companies like Grayscale, Canary, and WisdomTree.
An XRP ETF would be a good thing for its price because it would lead to more demand from institutional investors. JPMorgan estimates that these funds would attract over $8 billion in inflows.
Macro factors and Ripple prices
Other macro factors may affect the XRP price. The most notable one is the potential recession in the United States. A recession would be a good thing for XRP price and other crypto coins because of the impact on the Federal Reserve.
Historically, the Fed reacted to these risks by cutting interest rates. For example, it slashed interest rates during the pandemic leading to higher crypto and stock prices.
XRP price forecast
All the above are positive catalysts for the Ripple price. However, there is a risk that they have all been priced in by market participants.
The other risk is that the XRP price has formed a head and shoulders pattern on the daily chart. Its head is at $3.4, while the right and left shoulders are at $3. The neckline has moved to $1.9.
Therefore, a move below the neckline at $1.9 would likely lead to more downside, potentially to the psychological point at $1, which is about 55% below the current level.
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