XRP Price Prediction: Bank of Japan Decision Approaching, XRP Urgently Tests $1.75 Key Support

The shift in global macro policy sentiment is pushing XRP toward a critical crossroads. As the Bank of Japan may announce a rate hike on Friday, market concerns over a large-scale unwind of “yen carry trades” have sharply intensified, leading to a two-day consecutive plunge in XRP, testing a key support near $1.8 on December 18. In stark contrast to the short-term selling pressure, the XRP spot ETF market shows surprising resilience, with 23 consecutive days of net inflows totaling over $1.03 billion, alongside progress in the US Market Structure Bill. This intense collision between short-term headwinds and long-term fundamentals makes the $1.75 to $2.0 range a focal point for assessing XRP’s future trajectory over the coming months.

Short-term Pain: The Shadow of Bank of Japan Rate Hike and Yen Carry Trade Unwinding Risks

As global attention centers on the Bank of Japan headquarters in Tokyo, XRP’s price action clearly reflects market anxiety. Economists widely expect the BOJ to announce a 25 basis point rate hike on December 19, raising the policy rate to 0.75%. However, the real market fear is not the rate hike itself but the subsequent “neutral rate” guidance. If the BOJ hints that the neutral rate (the rate level that neither stimulates nor restrains the economy) target range is between 1.5% and 2.0%, it could signal the start of multiple rate hike cycles in 2026.

This outlook clashes with the recent dovish shift by the Federal Reserve due to cooling inflation, potentially narrowing the interest rate differential between Japan and the US. This poses a direct threat to the long-standing “yen carry trade” strategy, where investors borrow low-interest yen to invest in higher-yield risk assets like XRP. If the interest rate advantage diminishes, traders will be forced to unwind these leveraged positions, sell assets, and repay yen loans, triggering a chain reaction of declines across markets. Historical precedent: after the BOJ’s policy adjustment in July 2024, XRP plunged over 34% within just a few days. The risk of repeating this scenario is the most significant macro headwind suppressing XRP’s short-term price.

Long-term Foundation: Continuous ETF Inflows and Progress in the Market Structure Bill

Despite the looming macro clouds, institutional capital flows paint a different picture. Data shows that the US XRP spot ETF market has demonstrated strong capital attraction, with a net inflow of $18.99 million on December 17, setting a record of 23 consecutive days of net inflows, with total net inflows since launch exceeding $1.03 billion. This “buy-the-dip” attitude suggests some long-term investors view current volatility as a strategic entry point, buoyed by expectations of clearer regulation and adoption prospects.

Regulatory signals are also positive. White House AI and crypto affairs chief David Sachs recently revealed that the key Market Structure Bill has made significant progress and is expected to enter the Senate’s “markup” process in January 2025. The bill aims to provide a clear regulatory framework for cryptocurrencies, which is especially significant for XRP. Given that US courts have already ruled XRP itself is not a security, passing this bill would eliminate long-term regulatory uncertainty and pave the way for broader institutional adoption. Looking back at July 2025, when the bill was passed in the House, XRP surged nearly 15% in a single day, highlighting market sensitivity.

Deep Analysis of XRP Bull and Bear Factors

Core Short-term Bearish Factors:

• BOJ Risk: Rate hike and hawkish guidance may trigger unwinding of yen carry trades.
• Technical Weakness: Price has broken below the 50-day and 200-day exponential moving averages (EMA), indicating a bearish short-term trend.
• Macro Liquidity: Year-end holiday market thinness amplifies volatility risks.

Core Mid- to Long-term Bullish Factors:

• ETF Capital Flows: 23 days of net inflows show institutional willingness to buy on dips.
• Regulatory Outlook: Progress in the Market Structure Bill reduces long-term policy uncertainty.
• Valuation Support: Since the ETF launch in November, prices have retraced about 22%, approaching key support zones.

Technical Perspective: Key Levels and the Bull-Bear Divide

From chart analysis, XRP is at a critical technical juncture requiring a clear direction. After a roughly 6.5% decline over two days, XRP is significantly below the 50-day EMA (around $2.1562) and the 200-day EMA (around $2.4233), often seen by technical traders as a sign of medium-term trend weakening.

For traders, several clear price anchors are crucial. On the downside, $1.75 is the first key support level; if broken, it could slide further toward $1.50. On the upside, $2.0 is an important psychological and initial resistance level. Only if the price recovers and stabilizes above this level can it challenge the moving average resistance zones above. Analysts note that a break and hold above the 50-day EMA could signal a reversal of the short-term downtrend and open space for a mid-term rebound toward $2.5 or even near the 200-day EMA. In short, $2.0 has become the “decisive point” in the current battle between bulls and bears.

Risks and Outlook: How to Capture XRP’s Volatility Cycle

Overall, the XRP market is witnessing an intense contest between short-term risks and long-term value. In the near term (1-4 weeks), the BOJ decision and its chain reaction will be the primary drivers, with a cautious bearish bias, testing the $1.75 support. If the BOJ adopts an unexpectedly hawkish stance, combined with potential ETF inflow disruptions, prices could dip toward $1.5.

However, looking at the mid-term (4-8 weeks) and long-term (8-12 weeks), the outlook is more optimistic. Persistent ETF inflows provide a solid buying foundation, and progress in the Market Structure Bill in the first half of next year could serve as a strong bullish catalyst. Most analyses set the mid-term target around $2.5, with a long-term goal near $3.0. For investors, the current strategy should differentiate by investment horizon: short-term traders should remain vigilant for volatility from BOJ decisions and strictly adhere to stop-losses; long-term allocators might look for opportunities to accumulate in key support zones (such as the $1.75-$1.50 range), driven by confidence in US regulatory clarity and the long-term application of XRP in cross-border payments and other fields.