XRP clings to $1.30 as futures interest slide signals waning demand

Crucial takeaways

• Sentiment has been dampened by the Senate's failure to pass the CLARITY Act and the Fed's rate hike.
• Speculative demand appears softer as XRP futures open interest dropped from 2.25 billion to 2.12 billion tokens.
• Support is located between $1.28 and $1.26, where the 50-day and 100-day EMAs sit.

XRP was under bearish pressure on Friday, trading a little above $1.30 as buyers tried to protect a group of short-term moving-average support levels.

Since hitting $1.50 on Monday, the token has struggled. Sentiment turned lower after the Senate did not advance the CLARITY Act and the Fed increased its benchmark rate by 25 basis points, to a range of 3.75% to 4.00%.

Higher rates can tighten liquidity and curb demand for risk assets like crypto. But the Fed's move had been widely expected, which contained the immediate market response.

Ripple underscores XRP's current legal clarity

Ripple asserts that XRP already holds a significant legal edge after its long court fight with the SEC, despite the legislative setback.

The litigation, Ripple stated, determined that XRP is not inherently a security, providing the firm and the token with stronger legal standing even without a thorough U.S. digital-asset framework.

Ripple conceded that the CLARITY Act might have brought more clarity to the wider crypto industry. However, it maintained that XRP is on “settled ground” relative to many other digital assets.

Derivatives activity has weakened as XRP's price recovery fades. Open interest in XRP futures dropped to 2.12 billion tokens on Friday from 2.25 billion the day before. It has also fallen significantly from the 2.78 billion tokens seen on August 15.

A decline in open interest suggests that traders are unwinding leveraged positions or are hesitant to open new ones. Should the drop persist, XRP could have difficulty drawing the speculative demand necessary for a lasting recovery toward $1.50.

Still, the token showed some resilience after the Fed's anticipated rate increase.

Markus Levin, co-founder of XYO, pointed out that the central bank's stronger growth forecast indicates that policymakers do not see the U.S. economy heading toward a major downturn.

But the impact of higher borrowing costs may appear slowly as financial conditions become tighter.

XRP buyers defend support at $1.26-$1.28

XRP continues to trade above the 50-day and 100-day EMAs, which offer support near $1.28 and $1.26, in that order.

The 200-day EMA, roughly $1.36, is the initial major resistance. A clear break above that could strengthen momentum and open the way back toward $1.50.

Technical signals currently show consolidation with a bearish bias. The MACD indicator has dropped further below zero, and its widening negative histogram indicates that bullish momentum is fading.

The RSI is at 49, just under its neutral midpoint.

A daily close beneath the $1.26-$1.28 support zone would reinforce the bearish view and could lead to a more significant pullback.

On the other hand, if the price holds this area and reclaims $1.36, it would be an early indication that buyers are taking back control.