XRP (XRP) investors are witnessing a phase of consolidation as the market digests recent gains and anticipates regulatory clarity. The SEC’s decision to delay its verdict on multiple XRP spot exchange-traded funds (ETFs) has arguably stalled the token’s latest rally, leaving traders and holders in a wait-and-see scenario. 

Despite this temporary pause, the futures market and technical charts indicate that XRP remains positioned for a potential breakout or a defined corrective move. In this piece, broker Noah Specker from Highmont Group offers readers practical insights and expert analysis.

SEC Pauses XRP Rally: ETF Delay Impacts Market Sentiment

The U.S. Securities and Exchange Commission (SEC) postponed its decision this week on the approval of multiple XRP spot ETFs. Market participants were hopeful for a green light, especially following Solana’s (SOL) recent approval for a spot and staking vehicle. The delay has injected a degree of uncertainty, causing the token’s momentum to pause around critical resistance levels.

Historically, XRP rallies have been fueled by regulatory catalysts, as seen in November when Ripple’s court victory against the SEC propelled the token to $3 for the first time in years. While XRP has maintained a higher trading plateau, it has struggled to surpass its all-time high, leaving traders questioning whether the altcoin’s moment in this cycle is imminent.

Open Interest Signals Bullish Positioning

Even as XRP open interest (OI) in the futures market has decreased from a recent record of $11 billion to approximately $8 billion, levels remain historically high. This mirrors January’s figures when XRP approached $3.4, indicating sustained bullish positioning.

Traders’ leverage suggests that either

• XRP may decline slightly to trigger stop-losses on these leveraged positions, or
• Late buyers may see the $3 support as an optimal entry point for a potential rally.

The concentration of liquidity around these levels makes XRP poised for a significant short-term movement, regardless of direction.

Technical Outlook: Weekly Chart Shows Consolidation

The weekly chart for XRP/USD suggests a bearish short-term outlook as the token continues to retreat from the $3.42 resistance zone. XRP has closed three of the past four weeks in the red and has begun this week with additional losses.

Key support levels to monitor include:

• $2.5 area: Previously a resistance point, this zone could act as a magnet for short-covering, providing liquidity and potentially catalyzing a price recovery. It is also aligned with Fibonacci retracement levels, making it a strategic level for late buyers.
• $2 lower bound: A decline to this level would complete a full retracement within the current consolidation rectangle, setting the stage for the next major move.

While a sharp correction below $2 seems unlikely under current market conditions, the only major risk to this scenario would be a significant macroeconomic event, such as the Federal Reserve abandoning its planned interest rate cuts. Even a single rate adjustment could materially impact XRP and broader cryptocurrency markets.

Consolidation and Liquidity Dynamics

XRP’s current consolidation reflects a broader market behavior: tokens often experience sideways movement after large rallies, allowing liquidity pools to form at key levels. This phase is crucial because it sets the foundation for either a breakout or a deeper retracement.

High open interest alongside a pullback from resistance suggests that XRP is approaching a critical decision point. Traders should keep an eye on sudden volume surges or atypical options activity, as these could hint at the start of a new trend. 

Moreover, technical indicators like the Relative Strength Index (RSI) and moving averages show that XRP is not significantly overbought or oversold, reinforcing the likelihood of ongoing consolidation.

Market Sentiment and Altcoin Season

With Ethereum (ETH) trading above $4,000, BNB Coin (BNB) and Bitcoin (BTC) achieving new highs, the broader crypto market exhibits signs of bullish momentum. XRP, still constrained below $3.5, is showing patience among holders, indicating that investor confidence remains intact. 

The onset of altcoin season could favor XRP if a positive regulatory announcement or renewed buying pressure emerges.

Conclusion: XRP to $2 or Beyond?

In the near term, XRP appears to be navigating a critical support zone. A drop to $2.5 could offer liquidity-driven recovery opportunities, while the $2 level serves as the lower boundary for consolidation. Although bearish pressure exists, the macro and technical environment favors sideways to slightly bullish scenarios rather than sharp declines.

Investors should remain mindful of regulatory developments, futures market positioning, and macroeconomic factors such as Federal Reserve policy. If XRP maintains its support and liquidity dynamics hold, the token could be well-positioned for a renewed attempt at breaking the $3.4 resistance level, setting the stage for the next price discovery phase.

For now, consolidation persists, and XRP holders must monitor both technical levels and regulatory updates closely, as these will dictate whether the token resumes its upward trajectory or revisits lower support zones near $2.