XRP Today's News: ETF Funding Drops Suddenly Amid Federal Reserve's "Hawkish Rate Cut," $2 Threshold Becomes a Life-or-Death Line

In a week marked by intense battles between macro and micro factors, XRP price movement has fallen into a stalemate. On one hand, the Federal Reserve cut interest rates by 25 basis points as expected, briefly pushing XRP up to $2.1097; on the other hand, the one-day net inflow of XRP spot ETF funds shrank dramatically from $38.04 million to $8.73 million, indicating a shift in institutional sentiment toward caution. More critically, the Fed’s release of the “dot plot” suggests a significant slowdown in future rate cuts, with this “hawkish rate hike” stance dampening risk assets. Although technical indicators show XRP still below key moving averages of 50-day and 200-day, strong overall ETF demand and potential regulatory positives still leave hope for a mid-term rebound to $2.35–$2.50.

Price Review and Macro Battles: The “Sweet” of Rate Cuts vs. the “Bitterness” of the Dot Plot

Last week, XRP traders’ mood resembled a roller coaster driven by macro data. The week’s core event was undoubtedly the Fed’s rate decision on December 10, Beijing time. Despite concerns over sticky inflation and delayed economic data, the Fed decided to implement its third consecutive rate cut this year, lowering the federal funds rate target range to 3.50%–3.75%. This move, widely expected by the market, was initially interpreted as liquidity-friendly, causing XRP to rise briefly and hit an intraday high of $2.1097.

However, market optimism was quickly dampened by the subsequent release of the “Summary of Economic Projections” and the “dot plot.” This chart, regarded as an internal Fed indicator of future rate paths, showed most officials expecting only one rate cut in 2026, with another in 2027—more hawkish than the September forecasts. The Fed also projected that inflation would not return to the 2% target before 2028. This clear signal of “higher for longer” rates instantly reversed market sentiment. XRP’s price rapidly retraced gains, falling to a low of 2.0363 dollars, and closed the day down 3.14%, underperforming the broader market.

This “rate cut good news quickly becomes bad news” pattern perfectly illustrates the current core logic of the crypto market: prices are not driven by realized positives but by revisions of expectations about the future. The Fed’s hint at tightening liquidity in the short term prompted investors to reassess valuation models for all risk assets, making XRP no exception.

ETF Fund Flows and Market Structure: Signals Behind Institutional “Switches”

Just before the Fed’s decision, a subtle but crucial change occurred: the inflow of XRP spot ETF funds slowed dramatically. Data from December 9 showed total net inflow into the XRP spot ETF market was only $8.73 million, a sharp decline from the previous day’s $38.04 million. Notably, Franklin’s XRP ETF saw zero net inflow, after attracting $31.70 million the day before.

This “switch” is no coincidence. It clearly indicates that large institutional investors paused and adopted a wait-and-see stance ahead of major macro events. They paused injecting capital into XRP ETFs, waiting for more explicit forward guidance from the Fed before making decisions. This cautious stance contrasts with Bitcoin spot ETF, which recorded a healthy net inflow of $151.9 million on the same day, possibly reflecting a short-term rotation or risk reordering between assets.

The fluctuation in fund flows also reflects XRP’s deeper narrative dependency. Looking back to July, when the US House passed the key “Market Structure Act,” XRP surged 14.69% in a single day, hitting a new all-time high. If enacted into law, the bill would pave the way for clearer regulation of XRP and other cryptocurrencies. However, political setbacks like government shutdowns caused the bill’s progress to stall, and XRP retreated over 44% from its high. This indicates that, compared to mere monetary easing, clear regulatory frameworks are a more fundamental and powerful driver of XRP’s value discovery. The current ETF hesitancy partly stems from concerns over legislative uncertainty.

Key Drivers of Short-Term Bull-Bear Dynamics for XRP

Potential Bullish Catalysts:

1. Resumption and sustained strength of XRP spot ETF fund inflows.
2. Bipartisan support and progress of the “Market Structure Act” in the Senate.
3. U.S. Office of the Comptroller of the Currency approves Ripple’s banking license application.
4. MSCI delays or amends proposals to remove companies with high crypto exposure from indices.

Potential Bearish Risks:

1. Continued large outflows of ETF funds.
2. Final rejection of the “Market Structure Act” by the Senate.
3. Rejection of Ripple’s banking license application.
4. The Bank of Japan raises interest rates and ends QE, triggering a wave of unwinding arbitrage trades.
5. MSCI enforces delisting rules, undermining corporate confidence in holding cryptocurrencies.

Regulatory Dynamics and Fundamental Support: Beyond Price, the Technical Narrative

Beyond short-term price swings, XRP’s fundamental narrative is quietly advancing in two key areas that could form the long-term foundation. First is Ripple’s attempt to secure a nationwide banking license from the U.S. Office of the Comptroller of the Currency. If approved, this would be a milestone for the industry. It could provide Ripple with more stable, broader USD payment channels, significantly enhance its compliance and competitiveness in mainstream finance, and, more importantly, send a strong signal to the market: leading crypto solution providers can gain core access to traditional financial systems. This would significantly boost confidence in XRP’s long-term ecosystem development.

Second is the ongoing legislative battle over the “Market Structure Act.” Recent reports indicate that negotiating Democrats have accepted most parts of the Senate version, but disagreements remain on core principles such as token classification and illegal finance. The final legislation will directly address the unresolved question: “Is XRP a security?” A crypto-friendly bill could clear the largest regulatory hurdle for XRP’s development in the US market and unlock substantial institutional demand. Therefore, any positive progress on this bill could act as a “trigger” for a new XRP rally.

Technical Analysis and Trading Strategies: Key Levels of Defense and Attack

From a technical perspective, XRP is at a critical decision point. On the daily chart, the price has remained resilient above the important psychological level of $2.00 despite the impact of the Fed decision. However, resistance looms at the 50-day exponential moving average (currently around $2.2508) and the 200-day EMA (around $2.4660). Both are currently in a bearish alignment, indicating the medium-term trend has yet to reverse.

Traders should base their strategies around these key levels. The primary support is at $2.00. If this level breaks convincingly, the price could further decline to $1.9112 and even $1.8239 (November lows). Conversely, if the price can hold above $2.00 and gather strength, the first upside target is to challenge the 50-day moving average. A successful break and hold above this could signal the end of the short-term downtrend, with potential to test resistance zones at $2.35 and $2.50.

A positive sign is that, despite technical weakness, XRP spot ETF has accumulated a net inflow of $277.5 million since December—far exceeding Bitcoin spot ETF’s $3.8 million during the same period—providing solid fundamental support. This short-term divergence between technical and fundamental signals often hints at larger future price corrections (upward or downward). In the current macro cautious and regulation-sensitive environment, investors should adopt a “defend key levels and look for counterattack opportunities” strategy—focusing on reactions at support and resistance, monitoring ETF flows, regulatory news, and other fundamentals, rather than blindly chasing price moves.

Conclusion

This week, XRP’s market vividly showcased a “triangle game” among macro policies, institutional funds, and regulatory narratives. The Fed’s hawkish rate cut shattered the liquidity-only illusion, while the sudden slowdown in ETF inflows exposed genuine institutional caution. In the short term, the $2.00 level will be the battleground for bulls and bears, determining whether prices form a bottom and rebound or deepen the correction.

However, looking further ahead, XRP’s fate may hinge less on daily rate expectations and more on the progress of regulatory frameworks and real-world application ecosystems. Ripple’s banking license application and the legislative process surrounding the “Market Structure Act” are the “gray rhino” events with potential to trigger a paradigm shift. For investors, while closely watching price charts, patience in interpreting Washington’s political dynamics might be even more crucial. At the crossroads of crypto and traditional finance, XRP’s journey is unlikely to be smooth.