Will XRP Price Hold Key 2024 Support Level as CLARITY Act Enters Pivotal Week?

XRP price has dropped to test a 2024 support level following a 35% crash in the last three months. These losses have been driving a bearish sentiment from traders, with the funding rate remaining negative in the last two days. This signals a surge in short positions despite a potential shift in the US crypto regulatory framework this week as Congress resumes sessions after a two-week recess.

XRP Price in Focus as CLARITY Act Enters Pivotal Week

XRP price traded at $1.32 at press time with a slight 0.24% drop in 24 hours. The decline follows escalating tensions at the Strait of Hormuz, which has reduced interest in risk assets.

The lack of gains comes despite a pivotal week for the CLARITY Act. As earlier reported, Congress will be back in session on April 13, and there are speculations that the Senate Banking Committee will hold a markup to discuss the crypto bill.

In the days leading up to Congress’s resumption, several members of Trump’s inner circle, including the Treasury Secretary and the Chairs of the US Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC), had voiced their support for the bill, saying that it needs to be passed.

XRP could be among the biggest beneficiaries if this bill passes. This is because it will eliminate regulatory uncertainty and draw institutional interest. Some institutions could be frontrunning the likelihood of the bill passing after inflows to the spot XRP ETF reached $9 million on Friday last week, the highest in two months.

Bulls Defend Key Support as Bears Bet on Further Dips- XRP Weekly Analysis

Following a 35% decline in price for the last three months, XRP price is now testing a support level that was established in 2024. This support lies at $1.283, and bulls have been defending it since early February, as seen in the weekly chart.

Additionally, XRP’s bearish moves also caused the price to fall below the 150-day SMA, indicating that the long-term outlook has also changed to bearish. This suggests that the price might lose this support level if buyers remain on the sidelines.

The RSI also supports this bearish thesis because of the reading of 32, which shows there are no buyers in the market. This RSI is approaching oversold levels as the volume bars show that sellers have been active for the last four consecutive weeks. An oversold RSI could signal that the downtrend might come to an end as sellers become exhausted.

XRP might escape this bearish outlook if buyers step back into the market and the price moves above the key resistance level at $1.47. However, traders are not betting on recovery and are instead taking bearish positions on the futures market.

According to data from Coinglass, XRP’s funding rate has been negative since April 11. This indicates that there are more traders who are opening short positions on XRP than long positions. However, this might be bullish in the long term if a price increase causes a short squeeze.