XRP Price Prediction: Near 30% Drop in Q4, ETF Fund Flows Slow Down, $2 Support Becomes the Key Battle Between Bulls and Bears

XRP experienced a significant correction in Q4, with a decline of 28.9%. Its spot ETF capital inflows remain weak, with net daily inflows below $50 million for several consecutive days. However, at the critical psychological level of $2, buy-side support has shown extraordinary resilience, preserving the spark for a price rebound. Aside from macro monetary policy influences, the US Congress’s progressing “Market Structure Bill” has become a key catalyst for XRP and the entire crypto market. Any fluctuations in its legislative process could trigger sharp asset price volatility. This article will analyze the conflicting signals from technical and fundamental perspectives and outlook XRP’s medium-term trajectory.

ETF Hotbed Cools, XRP Faces “High Beta” Pain

Recently, XRP’s price has been weak, contrasting sharply with initial market enthusiasm. Since the launch of the spot ETF, institutional interest seems to be rapidly cooling after initial capital inflows. Data shows that as of the week ending December 10, the daily net inflow of US XRP spot ETFs has been below $50 million for several days, with only $10.2 million net inflow on December 10. This “high open, low decline” capital situation has undoubtedly dealt a blow to investors expecting “mainstream adoption” to bring substantial capital.

The causes of this phenomenon are multifaceted. First, although traditional financial giants like Vanguard have shifted towards opening investment avenues for crypto spot ETFs, actual capital inflows have not exploded, reflecting widespread caution among traditional investors amid current macro uncertainties. Second, XRP, as a typical high-beta altcoin, exhibits price elasticity (volatility) often far greater than Bitcoin during market risk appetite swings. When Bitcoin spot ETF capital flows improve, capital may prefer to flow into Bitcoin, seen as “digital gold,” rather than XRP, amplifying XRP’s price volatility.

Deeper still, this weak capital flow is closely related to Fed monetary policy expectations. The Fed dot plot projects only one rate cut by 2026, indicating a hawkish stance that suppresses market enthusiasm for risk assets. However, recent unemployment claims surged to 236,000, significantly boosting market bets for the first rate cut in March 2025. According to the CME FedWatch tool, the probability has risen to nearly 50%. This divergence between expectations and official guidance is itself causing market volatility, with XRP bearing the brunt.

Contradictory Technical Signals, $2 Becomes Life and Death Line for Bulls and Bears

From the chart perspective, XRP is currently at a critical crossroads. After breaking below the 50-day and 200-day exponential moving averages (EMA), the technical structure has shifted to short-term bearish. On December 11, XRP closed at $2.0343, continuing to underperform the broader market. However, an important positive signal is that when the price touched the $2 psychological level, it exhibited stubborn and sustained buy support. This is not only a psychological threshold but also the trendline support connected by multiple previous lows.

This technical contradiction—weakening moving averages versus firm support—reflects the current divergence in market fundamentals. The bears rely on weak capital inflows and macro uncertainties; meanwhile, the bulls believe that successful defense at $2 indicates that “smart money” does not recognize further significant downside. There is accumulated strong support here. If price can hold above $2 and regain the 50-day moving average (around $2.2424), it could confirm a short-term bottom and open the way toward $2.35 or even $2.5.

Key XRP Price Levels and Technical Indicators

• Core support levels: $2 (psychological and trendline support), $1.9112, $1.8239 (November lows)
• Key moving average resistance: 50-day EMA at $2.2424, 200-day EMA at $2.4617
• Upper resistance zones: $2.2, $2.35, $2.5, $2.62
• Long-term targets: $3 and the all-time high of $3.66
• Recent performance: Down 28.9% in Q4, retraced 44.5% from July’s historical high

For traders, the current strategy is relatively clear but requires strong discipline: treat $2 as a short-term critical dividing line. A confirmed effective breakdown (daily close below $1.8239) would invalidate the medium-term bullish structure, warning of deeper corrections. Conversely, if the price stabilizes at this level with increased volume, a rebound can be expected. Until clear catalysts emerge in fundamentals, range-bound trading may be the most probable scenario.

Politics as the Biggest Variable: Market Structure Bill Decides Long-term Narrative

If capital flows and technical signals dictate XRP’s short-term “temperature,” then political battles in Washington hold the key to its long-term fate. The US Congress’s “Market Structure Bill” is undoubtedly the most heavyweight industry catalyst currently. If passed, it will provide a clear regulatory framework for digital assets, resolving core issues such as token classification and stablecoin regulation, fundamentally improving the operational environment for crypto firms in the US.

Despite recent US government shutdown risks overshadowing the bill’s prospects for passage in December, bipartisan negotiations are ongoing. Reports indicate that Democrats have accepted a significant portion of the banking committee bill text. Industry representatives have held meetings at the White House, demonstrating high-level legislative momentum. Historically, XRP has been highly sensitive to such news: in July, when the House submitted the bill to the Senate, XRP surged 14.69% in a single day, reaching a historic high of $3.66 the next day. This underscores how policy narratives are a powerful driver of XRP’s price.

Another potential positive for Ripple is its application for a nationwide banking license from the OCC. If approved, this would greatly enhance its compliance and institutional credibility, possibly further boosting XRP adoption in cross-border payments and other sectors. These political and regulatory developments could outweigh short-term ETF capital flows, as they determine the “rules of the game” and long-term growth ceiling for XRP and the entire crypto market.

Market Outlook: Interplay of Bull and Bear Factors, How to Seize Key Nodes

Overall, XRP’s medium- to short-term outlook exhibits the classic “battle between bulls and bears.” The bullish side holds several key cards: resilient support at $2, potential favorable developments from the Market Structure Bill, possible bank license approval, and a macro shift toward dovishness that could reignite ETF inflows. If these factors align, prices could challenge $2.35 within 1-4 weeks and target $2.5 in 4-8 weeks.

However, downside risks are also significant. Besides ongoing ETF capital outflows and legislative setbacks, macro “black swans” could emerge from actions of other major central banks. For example, if the Bank of Japan begins raising interest rates and ends QQE, it could lead to large-scale yen carry trades unwinding, tightening global liquidity, and impacting risk assets. Additionally, if MSCI removes Digital Asset Treasury Bonds (DAT) from its indices, it could weaken large holders’ interest in using XRP as reserve assets.

For investors, adopting a “key event-driven” strategy might be wise at this stage. Rather than obsessively monitoring daily price swings, focus on upcoming calendar events such as US inflation and employment data releases, legislative hearings or votes on the Market Structure Bill, and weekly capital flow reports for XRP spot ETFs. These fundamental factors are more likely to steer the price toward a clear direction.

Context: The New Battlefield Post SEC Ripple Lawsuit

To understand XRP’s current high sensitivity to politics, one must look back at its legal battle with the US SEC. Although Ripple has achieved several legal victories that cleared some hurdles for XRP trading, this does not automatically translate into comprehensive regulatory clarity. The SEC lawsuit primarily addressed whether XRP as a token sale constitutes a securities offering, but did not establish a forward-looking regulatory framework for the industry.

Therefore, the significance of the Market Structure Bill lies in its attempt to establish a new, systematic regulatory framework at the congressional level, resolving issues like token classification, exchange responsibilities, and investor protection once and for all. For XRP, transitioning from a “court victor” to a “legally protected compliant asset” is essential for broader institutional adoption. This explains why the legislative process is so closely watched—this is not just hype, but a fundamental reassessment of XRP’s long-term fundamentals.

XRP’s price is struggling to find direction amid multiple narratives: short-term ETF capital weakness and macro hawkish signals exert pressure, while its resilience at key levels and expectations of long-term policy support provide hope. Its current situation mirrors the broader crypto market’s quest for mainstream acceptance—waiting for a breakthrough signal amid traditional finance scrutiny and regulatory constraints. For observers, the battle at $2 is not just a price fight but a test of market confidence. In the coming weeks, news from Washington may be more decisive than any technical indicator in determining the final outcome of this fight.