XRP Loses Momentum After Strong Rise: Causes and Future Prospects

After reaching a new 52-week high in July, XRP (CRYPTO: XRP) is currently struggling to maintain its growth momentum. Over the past 30 days, XRP has fallen by up to 20%, a concerning figure compared to other top cryptocurrencies. During the same period, Ethereum (CRYPTO: ETH) increased by 10%, while Bitcoin (CRYPTO: BTC) and Solana (CRYPTO: SOL) only saw slight declines of 5% and 7%, respectively. Clearly, XRP is becoming the "dark spot" in the overall landscape of the crypto market. Main Cause: The Shadow of Legal Regulations Returns One of the biggest reasons for XRP's weakness is the unexpected return of legal issues. In early August, it seemed that all legal disputes with the Securities and Exchange Commission of the United States (SEC) had come to an end after Ripple – the company issuing XRP – reached a settlement agreement in a lawsuit that had been ongoing since late 2020. This news was initially expected to create a significant boost for the price of XRP. However, the opposite happened: XRP not only did not increase but also became one of the worst-performing coins in the market. What is more concerning is that the legal environment in the US seems to be unfavorable for Ripple. The decision regarding the (ETF) spot trading XRP exchange-traded funds – which was expected to be approved this month – has been delayed by the SEC until mid-October. Additionally, Ripple has also expressed concerns that the new bill on the structure of the digital asset market soon to be passed by the US Congress may negatively impact the company's business operations. Important projects such as applying for banking licenses in the US or implementing real asset tokenization solutions (Real World Asset Tokenization) also risk delays if there is no clarity from the legal framework. Should We Worry About XRP? The main issue that investors need to monitor is the SEC's ability to approve spot XRP ETFs. Previously, analysts – including Bloomberg – had predicted an almost certain approval probability of (95%) this year. However, data from recent online prediction markets, such as Polymarket, indicate that this rate has decreased to around 78%. Although it remains a high figure, this downward trend somewhat reflects the cautious sentiment of investors. The price of XRP also faced difficulties when approaching important milestones. Both times XRP approached the $4 mark this year were hindered by negative events. In January, XRP reached $3.40 before dropping due to news about new tariffs. By July, when it hit $3.65 - the 52-week peak - the market received news that a senior executive of Ripple sold $175 million XRP, extinguishing the upward momentum. Upcoming Prospects If I had to point out the biggest reason why XRP is lagging behind, it is the ongoing legal uncertainty surrounding Ripple. This is quite ironic considering that the historic lawsuit in 2020 seemed to have come to a close. It is predicted that in the near future, there is a high possibility that spot XRP ETFs will be approved by the end of this year. At that time, the price drop in August may just be a "temporary storm." However, from now until then, XRP is likely to remain highly volatile. Investors need to be cautious, closely monitor legal developments, and prepare psychologically for the next "big waves."