XRP Price Rally: Fed Policy and Legal Developments Fuel Bullish Momentum

TLDR

XRP has recovered to $2.24, marking an 18% increase after hitting lows below $2

Reports suggest the Ripple vs. SEC lawsuit may be concluding with a potential $125 million settlement

CME Group data indicates a 99% probability of the Federal Reserve maintaining current interest rates

Derivative markets show bullish sentiment with increasing open interest and favorable long/short ratios

Major asset managers including Franklin Templeton are pursuing XRP ETF products

The cryptocurrency market has shown resilience this week with XRP leading a strong recovery. After dropping below $2 in recent days, Ripple’s native token has bounced back to reach $2.24. This 18% price jump comes as investors react to multiple positive developments.

Market analysts point to two key factors driving XRP’s price movement. The first is growing optimism about a resolution to Ripple’s legal battle with the SEC. The second is favorable macroeconomic conditions, particularly regarding Federal Reserve policy.

The long-running lawsuit between Ripple and the Securities and Exchange Commission appears to be nearing its conclusion. Sources familiar with the matter suggest negotiations center around a $125 million fine. The SEC may also impose restrictions on Ripple’s ability to sell XRP to institutional investors.

This legal clarity could remove a major obstacle that has limited XRP’s growth potential. The lawsuit has kept many US-based exchanges from listing XRP since December 2020. A resolution might encourage these platforms to relist the token.

Recent inflation data has further boosted market sentiment. February’s Consumer Price Index showed inflation cooling to 2.8%, down from January’s 3%. This reading came in below the expected 2.9%, suggesting price pressures are easing.

Fed Rate Cuts?

The CME Group’s FedWatch tool now indicates a 99% probability that the Federal Reserve will maintain current interest rates at its March 21 meeting. This outlook has strengthened investor confidence in risk assets like cryptocurrencies.

Technical indicators for XRP show mixed signals but lean positive. The token is currently trading in a range between $2.03 and $2.27. The Relative Strength Index shows upward momentum. The Ichimoku cloud pattern suggests an upcoming bullish crossover.

A successful break above the $2.34 resistance level could open the path toward $2.60. This level coincides with the upper Bollinger Band. Failure to hold above $2.24 could see prices test support at $1.92.

Derivative market data adds weight to the bullish case. Open interest has increased by 3.48% to $3.05 billion. Options open interest has surged 10.69% to $1.37 million. These metrics indicate growing trader commitment to their positions.

Long/short ratios across major exchanges reveal strong bullish sentiment. Binance data shows a 2.49 long/short ratio for XRP/USDT pairs. OKX traders display similar confidence with a 2.14 ratio. These numbers suggest more traders are betting on price increases.

Recent liquidation events have favored bulls over bears. Data shows $4.61 million in short liquidations versus $4.25 million in long liquidations over a 24-hour period. This suggests short sellers are facing increasing pressure.

Beyond the SEC lawsuit, other developments could support XRP’s growth. Ripple is working on a DFSA license to expand its blockchain payment capabilities. This regulatory approval would strengthen Ripple’s position in the global payments infrastructure.

Institutional interest in XRP has grown with major asset managers exploring XRP-based investment products. Franklin Templeton has joined Grayscale and WisdomTree in working toward an XRP ETF. These products could bring significant new capital to the XRP market.

Volume analysis indicates selling pressure may be weakening. The recent price surge follows a contraction in volume after a 1.63 billion token selloff. This pattern suggests sellers are losing momentum while buyers step in.

The recent price action follows a steep 27.53% correction from previous highs. Buyers have successfully defended the early recovery gains above $2.24. A continued rally could target the $2.76 level seen in recent weeks.