XRP price fails to respond to two extremely bullish developments — Here is why

XRP’s price action presents a compelling case study in the interplay between regulatory developments, market sentiment, and derivatives trading. Despite two major bullish events in 2025 – its inclusion as a candidate for the US “Digital Asset Reserve” and the settlement of the SEC lawsuit – XRP has underperformed the broader crypto market. This underperformance, however, doesn’t negate the potential for significant future growth.

The upcoming SEC decision on a spot XRP ETF is a key catalyst. The current $2.2 billion in XRP futures contracts indicates substantial institutional interest, although this isn’t solely bullish; it also reflects potential short positions. The substantial increase in open interest, a 31% jump in two weeks, underscores the heightened market activity surrounding this decision.

Leverage use has also increased, with the annualized funding rate for XRP futures nearing its highest point in six months. While this elevated rate (currently around 19%) reflects optimism, it’s significantly below the peak of 100% seen in December 2024. This suggests there’s considerable room for further bullish sentiment to develop.

Despite the positive regulatory developments, XRP’s price appreciation has been limited, partly due to Senator Lummis’s refusal to meet with Ripple representatives. Ripple CEO Brad Garlinghouse has publicly urged Senator Lummis to reconsider her stance, advocating for a more unified approach to crypto regulation in the US.

The removal of regulatory threats opens doors for partnerships and acquisitions, historically positive catalysts for XRP. The substantial futures open interest could amplify the impact of such announcements. A potential SEC approval of a spot ETF, coupled with strategic partnerships, could propel XRP to $3.50 or higher, surpassing its current all-time high. However, the final SEC decision, expected in October, remains the pivotal factor influencing XRP’s near-term trajectory. This analysis is for informational purposes only and should not be construed as financial or investment advice.