XRP Struggles to Gain Momentum Despite Legal Victory and ETF Speculation

XPR recently achieved a significant legal victory when the U.S. Securities and Exchange Commission (SEC) dropped its lawsuit against Ripple.

The cryptocurrency market has been closely following the recent developments surrounding XRP, especially after the U.S. Securities and Exchange Commission (SEC) dropped its lawsuit against Ripple. As the dust settles on this legal battle, market investors are beginning to question why XRP isn’t showing any huge price gains despite the positive news.

After several years of legal disputes, XRP finally saw the SEC drop its case in mid-August, marking a turning point for the token. However, to the surprise of many, XRP's price has not surged to new highs as some anticipated. According to CoinMarketCap data, XRP is currently trading at $2.12, down 12% in 48 hours and a far cry from its 2018 all-time high of $3.40.

The token did manage to touch the 2018 ATH during the first days of January but failed to break through it. Instead, XRP's price has remained stagnant, leaving traders disappointed by the lack of significant price action despite the positive news.

Several positive developments have unfolded in recent weeks. Hashdex received approval from Brazil's CVM to launch the world's first XRP ETF, while rumors of a possible spot ETF from Spark Digital Capital also surfaced.

Moreover, Ripple's planned IPO has generated interest in the crypto community, and the political landscape showed signs of change as former U.S. President Donald Trump mentioned XRP as a potential asset for the country's strategic crypto reserves.

With all these positive fundamental developments, some traders are wondering why XRP's price has not shown more substantial growth. The technical framework might provide an explanation for this situation.

Crypto analyst Ali Martinez pointed out that for the market to adopt a positive sentiment, XRP needs to rise above the $3 target. This potential price increase could render the present head-and-shoulders pattern meaningless, thus generating positive market outlooks. On the other hand, dropping to $2 increases dangers for further market depreciation.

"For the narrative to change, we need to see a move above $3. If the price drops below $2, then we can expect further depreciation of the token," Martinez stated in a recent analysis.

As XRP stands at a critical juncture, traders are keeping a close eye on key support and resistance levels. If the price manages to break through the $3.50 resistance, it could signal a rally towards the $5 zone, potentially opening the door for further gains to $8. However, if the support at $2 is breached, it could lead to a decline towards the $1 zone.

Furthermore, XRP's sluggish price growth can be attributed to the fact that major investor interest has decreased. Previously, the market used to see significant investment activity from big players, commonly known as whales, immediately following important events, such as the U.S. elections.

However, retail traders are now driving the market activity as large investors have withdrawn from the space in recent weeks. This reduced participation from major investors might explain why XRP is trading at significantly lower levels. It seems that investors have little appetite for taking big risks in this market period.

The sluggish growth of XRP can be attributed to two main elements and broader market circumstances. The cryptocurrency market remains unstable due to increasing price inflation, market rate volatility, and global political tensions.

Most potential investors maintain a protective stance due to ongoing market instability as they prefer to postpone major financial decisions. Despite strong fundamental developments, such as the SEC dropping its lawsuit against Ripple and rumors of an XRP ETF in Brazil, the sluggish price action might be related to the fact that investors are not yet feeling confident enough to enter the market in large numbers.

Therefore, for XRP to experience a new bull run, it needs to sustain itself above $2 and pierce through the $3 resistance levels. Only then can investors expect renewed confidence in its upward potential. Until that happens, the market remains in a state of cautious anticipation.