XRP Price Drops Amid SEC ETF Delays and Ripple’s Rejected Acquisition Bid

On Thursday, the price of XRP fell 2.6%, dropping to $2.20 as ripple effects from two significant events shook the market. The U.S. Securities and Exchange Commission (SEC) announced a postponement on decisions regarding all seven pending applications for spot altcoin ETFs. Additionally, Ripple Labs faced further negative sentiment after its $5 billion offer to acquire stablecoin issuer Circle was rejected. These developments have amplified bearish sentiment across the crypto market, particularly among altcoins, which are perceived as vulnerable to regulatory scrutiny.

SEC Delays Weigh Heavily on Crypto Market

The SEC’s announcement about delaying decisions on ETF applications coincided with XRP’s decline. This uncertainty has triggered bearish sentiments not just in XRP but also across other major altcoins like Dogecoin (DOGE), Avalanche (AVAX), and Solana (SOL), each reporting intraday losses of approximately 3%. This general discontent among investors highlights the fragility of the altcoin market, particularly for those assets that have filed for ETF consideration. While Bitcoin and Ethereum demonstrated relative stability, the overall trend pointed to increased outflows from altcoins perceived to be at risk during this regulatory limbo.

Ripple’s Acquisition Offer for Circle

In a twist of market dynamics, Ripple’s unsolicited bid to acquire Circle, valued between $4 billion and $5 billion, was met with rejection. Sources indicate that Circle deemed the offer undervalued based on its growth trajectory and ambitions for an initial public offering (IPO). Circle, which issues the U.S. dollar-pegged stablecoin USDC, is a key competitor to Ripple’s newly introduced RLUSD token. By publicly disclosing its desire to acquire Circle just as the latter moves toward an IPO, Ripple’s strategic ambition becomes evident—yet the rejection underscores potential friction in execution and the challenges the company faces in silencing investor uncertainties.

Market Capitalization and Investor Sentiment

As a subsequent outcome of Ripple’s plummeting XRP price and the SEC’s regulatory moves, the market capitalization for Ripple fell below the $130 billion mark—a substantial loss wiping out gains made in late April. This decrease in market cap serves as a barometer for investor confidence, signaling a risk-averse stance. Many traders are opting to reduce their exposure to altcoins that are vulnerable to the SEC’s analyses and decisions, fearing additional outcomes from the ongoing regulatory assessments. With overall market trends showing unease, it remains crucial for investors to closely monitor Ripple’s performance in this challenging landscape.

XRP Price Forecast: Short-Term Resilience?

Despite the recent downturn, the short-term forecast for XRP shows signs of resilience. The price managed to bounce back from an intraday low of $2.19, closing at $2.2199, representing a 1.33% increase. This movement suggests that buyers are committed to defending key support levels—specifically, the 50-day simple moving average (SMA), which now serves as an anchor for bullish sentiment. Technical indicators, including the Relative Strength Index (RSI) reading of 53.83, suggest a slight positive bias that might indicate a potential reversal or rally if buyers can maintain this momentum.

Looking Ahead: Key Resistances and Supports

The current price action indicates that XRP is approaching pivotal resistance levels, particularly at $2.25. A decisive break and close above this threshold could pave the way for gains towards $2.35. However, caution is warranted. A failure to regain these levels might expose XRP to further downturns, potentially pulling the price back toward $2.10. Nevertheless, the formation of higher lows throughout the past weeks signals that the underlying structure remains intact, with bullish support still evident despite the prevailing market challenges.

Frequently Asked Questions (FAQs)

1. Why did XRP drop 2.6% recently?
   XRP’s decline was triggered by the SEC’s decision to postpone ETF applications, coupled with Ripple’s failed acquisition bid for Circle, causing investor unease.

2. What was Ripple’s offer to acquire Circle?
   Ripple made a $4–$5 billion offer to purchase Circle, which was rejected as it did not reflect Circle’s growth and IPO prospects.

3. What does the technical analysis say about XRP’s future?
   XRP holds support above the 50-day SMA. If it breaks above $2.25, it could target gains toward $2.35 in the near term.

In conclusion, while Ripple faces immediate hurdles, including regulatory uncertainties and strategic rejections, the resilience demonstrated in XRP’s price movements, paired with favorable technical indicators, suggests that the market is still keenly observing for cues of recovery. Investors should remain vigilant, as shifts in sentiment and regulatory outcomes could redefine the altcoin landscape in the upcoming weeks.