XRP continued its downward trajectory for the second consecutive day, even after a major milestone was reached with the approval of Canada’s first spot XRP exchange-traded fund (ETF). The decline came as broader market sentiment soured amid geopolitical and macroeconomic uncertainty.
Purpose XRP ETF Gets Green Light in Canada
On Tuesday, asset manager Purpose Investments received final approval from Canadian regulators to launch the Purpose XRP ETF, the first spot XRP ETF in the country. The fund is set to begin trading on the Toronto Stock Exchange (TSX) on June 18, under the ticker XRPP.
Despite the landmark approval, XRP’s price failed to respond positively. Over the past 24 hours, the token dropped 3.4% to $2.17, with its market cap sliding to $127 billion. The decline followed a wider crypto market sell-off that saw the global market cap fall by 3.6%, dragged down by weakness in Bitcoin and other major assets.
Broader Market Headwinds Weigh on Sentiment
Market sentiment has turned risk-off due to intensifying geopolitical tensions in the Middle East and rising uncertainty around the U.S. Federal Reserve’s monetary policy. Fears of persistent inflation have dimmed expectations for a near-term rate cut, adding pressure across risk assets, including cryptocurrencies.
The recent delay by the U.S. SEC in ruling on Franklin Templeton’s spot XRP ETF has also added to the short-term bearish outlook. The decision has been pushed to late July, extending regulatory uncertainty for U.S.-based XRP investors.
Legal and Policy Tailwinds Ahead
Despite current price weakness, some bullish catalysts are emerging for XRP:
- Ripple and the SEC have reportedly agreed to a $50 million settlement, potentially concluding the long-running legal battle that has cast a shadow over XRP’s regulatory status.
- Former CFTC Chair Chris Giancarlo has proposed the issuance of government bonds collateralized by crypto assets like XRP and Bitcoin, signaling increasing policy acceptance of tokenized finance.
- Ripple is expanding its global footprint with the imminent launch of its RLUSD stablecoin and strengthening regulatory ties in Dubai and Singapore, both seen as crypto-forward jurisdictions.
Mixed Technical Signals
On the weekly chart, XRP is forming a multi-month bull pennant pattern a bullish continuation structure. If confirmed, a breakout from this setup could target $4.61, a 114% gain from current levels. This projection is based on the height of the flagpole leading into the pennant.
Technical analyst Mikybull Crypto drew comparisons with XRP’s 2017 price action, suggesting the current formation mirrors the one that led to a 1,300% rally toward all-time highs near $3.40.
However, short-term indicators flash caution:
- A death cross has appeared on the daily chart, with the 200-day SMA crossing above the 50-day SMA, a pattern often associated with bearish reversals.
- Momentum indicators such as the MACD and RSI are both trending lower, reinforcing the near-term downside risk.
- Should XRP break below its $2.00 psychological support, a drop toward $1.62 its April 2025 low becomes increasingly likely.
Conversely, a successful breakout above the bull pennant resistance could reignite bullish momentum, with the next major resistance near $4.00–$4.61.
While short-term market conditions remain challenging, the approval of Canada’s first spot XRP ETF marks a significant regulatory milestone. Combined with Ripple’s legal progress and international expansion efforts, the medium- to long-term outlook for XRP remains cautiously optimistic provided it can hold key technical levels and reclaim investor confidence in the coming weeks.
