XRP Faces Uncertainty Despite Bullish ETF Momentum

The XRP price continues to perplex investors, as the cryptocurrency remains stagnant despite several bullish developments, including rising ETF interest and regulatory clarity. As XRP lags behind the broader crypto market, traders and analysts are watching closely to see whether renewed institutional demand can finally trigger a long-anticipated breakthrough.

In recent months, XRP has shown minimal upside movement, even with significant news that could have ignited rallies in other digital assets. The announcement that XRP is being considered for the United States’ potential Digital Asset Reserve and the resolution of Ripple Labs’ prolonged legal battle with the U.S. Securities and Exchange Commission were both viewed as monumental. However, from March to May 2025, XRP slipped roughly 6% while the overall crypto market gained about 10%.

Spot XRP ETF Filing Boosts Market Interest

One of the most discussed developments has been the rapidly growing interest in a potential spot exchange-traded fund (ETF) for XRP. Multiple firms have reportedly filed applications with the hopes of launching such a product in the United States. A final decision from regulators isn’t expected until October, but anticipation is already impacting investment behaviors.

XRP futures activity has risen notably in response. As of May 22, total futures open interest soared to 923 million XRP, marking a 31% increase in just two weeks and valued around $2.2 billion. While this volume could suggest heightened institutional activity, it’s essential to acknowledge that futures are often used for both bullish and bearish speculation.

Some traders see the surge in leveraged futures as a bullish sign. A key indicator supporting this view is the annualized funding rate for XRP futures, which reached 19%—its highest in six months. Although far from the 100% annualized rate seen during a December 2024 price surge, the level remains supportive of bullish strategies in the derivatives market.

It’s important to note that when the funding rate is strongly positive, longs (those betting on upward movement) are paying shorts, reflecting prevailing bullish sentiment. In neutral market conditions, the funding rate typically ranges from 7% to 14%. A rate of 19% suggests optimism is returning, albeit cautiously.

Political Dynamics Impact XRP’s Trajectory

Another factor potentially weighing on XRP’s lackluster performance is the political climate surrounding cryptocurrency regulation. Ripple CEO Brad Garlinghouse recently urged U.S. Senator Cynthia Lummis to engage in meaningful discussions with Ripple and support crypto innovation more broadly. Lummis, chair of the Digital Assets Subcommittee, has thus far declined to meet with Ripple executives, which some view as a missed opportunity for policy progress in the United States.

Despite these hurdles, favorable regulatory developments are clearing paths for Ripple and XRP to explore strategic partnerships and potential corporate acquisitions. With the litigation risks reduced following Ripple’s settlement with the SEC, the company is arguably in a stronger position to pursue growth initiatives. This foundation could eventually drive a renewed surge in XRP’s value, especially if ETF approval materializes.

Sentiment among derivatives traders is rising, as many forecast XRP could climb toward the $3.50 mark, a 45% jump from its current range. Though the token remains below its all-time high of $3.25, history shows that XRP has surged dramatically following positive legal resolutions and partnership announcements. The existing $2.2 billion in futures bets could drive momentum if bullish sentiment continues to grow.

Looking Ahead for XRP

Although XRP has yet to mirror the strong performance of the wider crypto market, it’s poised at the intersection of regulatory clarity, institutional interest, and speculative optimism. With a spot ETF decision approaching and Ripple’s legal uncertainties behind it, market participants may soon see whether XRP can finally deliver on long-held bullish expectations.

Until then, traders will continue monitoring futures market trends and funding rate movements, which currently hint at revived interest but not full conviction. Whether this interest translates into meaningful price movement remains XRP’s central question.

Related: Expert Advice: Sell XRP If You’re Confused

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