XRP/USD Jumps Above $2.45, Reclaiming a Key Psychological Level

The rise follows news of the first U.S.-listed XRP futures ETF, a newly activated coin burn mechanism, and technical indicators that are aligning with the bullish shift in sentiment.

Ripple’s XRP/USD surged past the key psychological level of $2.45 on Thursday, reclaiming its 20-day exponential moving average. The cryptocurrency's rally follows news of the first U.S.-listed XRP futures ETF, a newly activated coin burn mechanism, and technical indicators that are aligning with the bullish shift in sentiment.

XRP price movements: XRP/USD traded at $2.38 in the early hours of Thursday, having risen steadily from $2.32. It is now seeing a rising open interest and the launch of a euro-denominedged stablecoin on the XRP Ledger, under the EU's MiCA regulatory framework.

The cryptocurrency, used by Ripple Labs for cross-border payments, has also been approved by U.S. regulators for futures-based ETFs. Volatility Shares introduced the XRPI fund on the NASDAQ, marking the first futures-based ETF for XRP in the U.S. According to CoinDesk, the fund will allocate 80% of its assets to XRP futures contracts, giving institutional investors regulated exposure without requiring custody of the underlying asset.

"This is a market first in a less volatile leveraged crypto ETF, which we've been tracking for a long time," Bloomberg Intelligence analyst, Eric Balchunas said in a post.

The new ETF comes as the SEC approved several other crypto-linked products, including a leveraged bitcoin futures ETF from ProShares.

The news follows a recent ruling by the SEC to allow institutional investors to gain exposure to cryptocurrencies through futures-based ETFs.

Insiders keep an eye on: As the SEC case unfolded, a major point of contention was the SEC's claim that XRP sold during the token's initial coin offering in 2013 could be classified as securities. The ruling ultimately recognized XRP as a commodity in the context of exchange-traded futures.

The ruling paves the way for new avenues of capital flow into the cryptocurrency market.

What happened: As the dust settles on the SEC case, Ripple Labs has begun rolling out a coin burn mechanism aimed at steadily cutting down the total supply of XRP in circulation. It's a deflationary move that could support long-term value, and with regulatory clouds starting to lift, it gives investors another reason to take the project seriously.

An overhang had long been Ripple's legal battle with the SEC. The case, which spanned several years, involved the SEC's investigation into whether Ripple had sold XRP as an unregistered security during its initial coin offering in 2013.

After a long-running legal battle, Ripple Labs has reached a settlement with the SEC, agreeing to pay $50 million in penalties to resolve the SEC's claims that it sold unregistered securities. The SEC also returned $75 million in previously imposed fines, according to a joint statement from the SEC and Ripple on Thursday.

The settlement marks a significant step in the regulation of cryptocurrencies in the U.S., with the SEC's actions having far-reaching implications for the industry.

The agency's decision to accept a settlement with Ripple could also influence its approach to similar cases pending against other cryptocurrency companies.

Standard Chartered has since lifted its year-end forecast for XRP to $5.50, attributing the adjustment to the recent ETF greenlight, easing regulatory overhang, and a fresh wave of interest in real-world asset tokenization.

"This development, coupled with the pending approval of several U.S. exchange-traded funds focusing on XRP futures, is likely to drive even more institutional interest in the cryptocurrency," Standard Chartered economists noted in a recent report.

The Standard Chartered analysts further highlighted the potential for crypto-denominated stablecoins to be launched on the XRP Ledger, subject to the EU's MiCA (Markets in Cryptoassets) regulatory framework.

The firm's economists also pointed out that the XVG euro-denominated stablecoin, set to launch in Q4 2024, will be directly regulated by the EU, presenting a unique opportunity in the evolving cryptocurrency landscape.

Technical analysis: XRP has now cleared resistance around $2.42-$2.45 and also moved above its 20-day exponential moving average. The RSI has also turned neutral-to-bullish, while a modest decline in exchange balances suggests accumulation by long-term holders.

According to blockchain intelligence platform, CryptoRank, approximately 60 million XRP moved between whale wallets over the past 72 hours.

The cryptocurrency futures market also saw significant shifts in activity, with futures open interest falling by nearly $930 million, hinting at some degree of profit-taking and risk-off repositioning following the ETF news.

However, open interest has begun to rise again in recent sessions, which may indicate that new directional bets are forming.

The broader market backdrop remains supportive, with Bitcoin BTC/USD continuing to trade at nearly $111,000 following