XRP ETF Momentum: $3 Target in Sight as Fed Signals Multiple Rate Cuts

XRP (Ripple) is testing key resistance at $2.2, fueled by a 12-day streak of institutional ETF inflows and rising bets on a dovish Federal Reserve. Easing stagflation fears and technical alignment suggest a bullish shift, setting the stage for a potential move toward $3.

The crypto market is showing distinct signs of a bullish divergence, with XRP gaining momentum despite the bearish technical bias indicated by its Exponential Moving Averages (EMAs). This rally is underpinned by robust institutional participation and supportive macroeconomic signals from the US. For traders, the combination of strong fundamentals and shifting policy expectations creates a clear short- to medium-term opportunity.

Institutional Demand: The Bullish Engine

The most significant bullish signal is the unwavering demand from institutional investors:

• ETF Inflow Streak: XRP-spot ETFs have extended their inflow streak to 12 consecutive sessions, signaling deep institutional commitment. On December 2 alone, net inflows reached $67.74 million, with the Grayscale XRP ETF (GXRP) leading flows.
• Supply-Demand Balance: The resilient institutional demand is crucial. As seen with Bitcoin (BTC), which soared 169% to its $125,761 high on the back of $63.7 billion in ETF inflows, consistent institutional buying directly supports price action and tilts the supply-demand balance in XRP’s favor.

Macro Pivot: Fed Rate Cuts and Easing Stagflation

Macroeconomic data is perfectly aligned to support risk assets like XRP:

Dovish Fed Bets: The ADP reported a 32k drop in employment in November. This, coupled with the ISM Services PMI Prices Index dropping from 70 to 65.4, suggests a softer inflation and cooling labor outlook. This has strengthened bets for a dovish Fed, with the CME FedWatch Tool showing an 89.0% chance of a December rate cut and a 52.9% chance of a March 2026 cut. Multiple rate cuts typically weaken the USD and lift crypto assets.

Sentiment Alignment: The Bitcoin Fear & Greed Index sitting in the Fear Zone (at 26), combined with social media sentiment aligning with historical "Fear Zone" buying opportunities, supports the view that the market is poised for a bounce.

Technical Blueprint and Key Regulatory Catalysts

XRP is testing a key technical and psychological level, with major regulatory milestones likely to serve as catalysts:

Key Technical Levels

Despite trading below its 50-day and 200-day EMAs, the price action is overriding the bearish technical trend.

Regulatory and Corporate Catalysts

Traders should monitor these high-impact regulatory events that could trigger sudden volatility:

• Market Structure Bill: The US Senate is preparing for a possible markup session of the bipartisan digital asset market structure legislation. Progress on Capitol Hill would provide the regulatory clarity institutions crave, acting as a massive tailwind for XRP.
• Ripple’s Bank Charter: The status of Ripple's application for a US national trust bank charter with the OCC remains a key driver. Approval would cement XRP’s role in regulated finance.
• MSCI Delisting Risk: The ongoing MSCI consultation on excluding Digital Asset Treasury Companies (DATs) from their indices is a major downside risk. A final decision (due in Jan 2026) to delist companies like MicroStrategy could trigger widespread selling pressure, potentially pushing XRP below $2 and exposing the $1.82 low.

The short-term outlook is cautiously bullish, provided the $2.2 support level holds. A successful move past the 50-day EMA will confirm the momentum toward the $3 target.

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