XRP Today News: ETF first day absorbs 164 million, The Federal Reserve (FED) dovish pushes 2.35 dollars

XRP fell back due to profit-taking after the launch of Franklin Templeton and Grayscale ETFs, but the net inflow of $164 million on the first day shows strong institutional demand. The Federal Reserve's probability of cutting interest rates in December surged from 50.1% to 84.8%, supported by a weak U.S. labor market and retail sales data backing the dovish interest rate path. On the technical side, XRP is trading around $2.20, with long positions targeting a resistance level of $2.35.

Franklin Templeton and Grayscale ETF First Day Performance and Market Reaction

Against the backdrop of severe volatility in the cryptocurrency market, the launch of two highly anticipated XRP spot ETFs has attracted market attention. Franklin XRP ETF (XRPZ) saw a net inflow of $62.59 million on its first day, while Grayscale XRP ETF (GXRP) had a net inflow of $67.36 million. The total net inflow for XRP spot ETF issuers on that day amounted to $164.04 million.

The first day trading performance of XRPZ was relatively subdued, in stark contrast to market expectations that Franklin Templeton's strong influence in the ETF space would drive robust institutional demand. Notably, the capital inflow on XRPZ's first day was far lower than that of the Canary XRP ETF (XRPC), which had an inflow of $243.05 million on its first day. This disparity indicates a difference in market confidence levels towards different issuers, with Canary enjoying a first-mover advantage and higher market recognition as one of the first XRP ETFs launched.

However, BTC spot ETF reported a net outflow of $151.08 million on Monday, increasing the possibility of XRP decoupling from BTC. In November, the Bitcoin spot ETF had a net outflow of $3.69 billion, causing the Bitcoin price to drop to a low of $80,523 on November 21. Bitcoin has affected both XRP and the entire market. However, as the market stabilizes, the spot ETF may become a stepping stone for XRP to decouple from Bitcoin.

On Monday, after the launch of the Franklin XRP ETF and Grayscale XRP ETF, traders took profits, and the XRP price fell. Before the launch on Monday, the XRP price surged by 17%, briefly decoupling from Bitcoin, which rose by 4% over the same two days. Notably, the fund inflows for the XRP spot ETF may be lower than market expectations, ending the previous two days of upward momentum.

The spot ETF fund flow situation on Tuesday, November 25, is crucial for trading on Wednesday, November 26. Strong capital inflows should boost demand for XRP, making its price expected to reach the resistance level of $2.35. Today's news focus for XRP will be on the release of the next day's ETF flow data, which will determine whether long positions can maintain their momentum.

The Federal Reserve (FED) interest rate cut expectations soar, limiting XRP's downside potential

Despite the close attention on the fund flows of the XRP spot ETF, the soft U.S. labor market and retail sales data have boosted market expectations for a rate cut by The Federal Reserve (FED) in December, thus limiting its downside potential. ADP data shows that the average weekly employment for the past four weeks has decreased by 13,500. The rise in the unemployment rate may suppress wage growth and dampen consumer confidence, potentially leading to a cooling of private consumption. The decline in consumer spending may also suppress demand-driven inflation.

The weak labor market data coincided with an unexpected decline in retail sales and a softening of producer prices, supporting the Federal Reserve's adoption of a more dovish interest rate path. Retail sales in September's control group decreased by 0.1%, following a 0.6% monthly increase in the previous eight months. At the same time, the core producer price index in September rose by 2.6% year-on-year, down from 2.9% in August. This combination of data indicates that the U.S. economy is cooling, providing the Federal Reserve with room to cut interest rates.

According to data from the CME FedWatch Tool, the probability of a rate cut in December rose from 84.4% on November 24 to 84.8% on November 25. More importantly, on November 18, the probability of a rate cut in December was only 50.1%, indicating that the market expectations have shifted dramatically in just one week.

Given the previous market's weakening expectations of a rate cut by The Federal Reserve (FED), the price of XRP has fallen below $1.9. A more dovish interest rate path from The Federal Reserve (FED) may boost the demand for XRP. Rate cuts typically weaken the dollar, enhancing the appeal of risk assets, and cryptocurrencies, as a high-risk asset class, will benefit directly. Although the market anticipates that The Federal Reserve (FED) will cut rates in December, pushing U.S. stock index futures higher on Tuesday, XRP still experienced a pullback, indicating that the negative impact of ETF inflows falling short of expectations has temporarily outweighed the macroeconomic positives.

Technical Analysis: $2.35 Becomes the Key Battleground

(Source: Trading View)

On November 25, XRP fell by 1.26%, partially giving back the previous day's gain of 8.73%, closing at $2.2003. The token's trend was in line with BTC and the broader market, with BTC and BTC dropping by 1.05% and 0.61%, respectively. Tuesday's pullback brought the token's trading price below the 50-day and 200-day exponential moving averages (EMA), indicating a bearish tendency.

XRP Key Technical Levels

Support Level: 2.2 USD, 2 USD, 1.9112 USD, and 1.8205 USD

50-day moving average resistance level: 2.3764 USD

200-day moving average resistance level: 2.5245 USD

resistance level: 2.35 USD, 2.5 USD, 2.62 USD, 2.8 USD, 3.0 USD and 3.66 USD

Currently, XRP is trading around $2.2, slightly below the 50-day EMA of $2.37, which is a key watershed for the short-term trend. If it can regain the 50-day EMA, it will confirm the recovery of the short-term upward trend. $2.35 is the primary target for long positions, and breaking through this level will open the way to $2.5. $2.5 is not only a round number but also close to the 200-day EMA, carrying significant psychological and technical meaning.

On the downside, $2.20 is immediate support, and a break below it will test the $2.00 round figure. $2.00 is an important psychological support and also the last line of defense for long positions. If it breaks below $2.00, $1.9112 and $1.8205 will become the next support targets. The drop on Tuesday further reinforced the bearish structure, and XRP still faces technical pressure in the short term.

Bullish and Bearish Scenario Analysis

Bullish Scenario: Long Positions Target $2.35

If the funding inflow for the XRP spot ETF is strong, blue-chip companies purchasing XRP as a treasury reserve asset, Ripple obtaining a U.S. charter bank license, and the U.S. Senate passing the market structure bill, it may break through the November 24 high of $2.2872 and advance towards the $2.35 resistance level. If it can continue to break through $2.35, it may test the 50-day moving average, while the upward trend line and $2.5 will be the next key resistance levels. Avoiding the downward trend line is key to achieving a breakout in the long positions market.

Bearish Scenario: Risk of Falling Below $2.2

If the XRP spot ETF report shows a net outflow, the U.S. Senate has delayed legislation favorable to cryptocurrencies (including the market structure bill), blue-chip companies have downplayed their interest in XRP as a treasury reserve asset, and the Office of the Comptroller of the Currency (OCC) has postponed or rejected Ripple's application for a U.S. chartered banking license, these bearish scenarios could push XRP towards $2.20. After falling below $2.20, the psychological support level of $2.00 may become the next target. If that support level is breached, the support level at $1.9112 and the trend line below will become the next key support level.

Key Catalysts in the Coming Days

On November 26, U.S. employment data and speeches from members of the Federal Open Market Committee (FOMC) may impact the interest rate path of the Federal Reserve (FED). A more dovish policy stance from the FED could boost demand for XRP and spot ETFs, pushing their price to $2.35. Meanwhile, traders should continue to closely monitor the progress of the Capitol Hill Market Structure Bill, which is another potential price catalyst.

Market expectations for a rate cut by The Federal Reserve (FED) in December are rising, and the influx of significant capital into XRP spot ETFs is laying the foundation for a bull market by the end of this year. The next few trading days may determine whether XRP can break free from the shadow of BTC and return to $2.5. Today's key news for XRP focuses on the flow of ETFs the next day and statements from FOMC members, which will provide clear direction for the short-term trend.