XRP Price Fails to React to Two Major Bullish Developments — Here’s Why

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The cryptocurrency market has seen significant momentum in 2025, with many digital assets capitalizing on favorable regulatory shifts and growing institutional interest. Among them, XRP—the native token of the Ripple network—has been at the center of two major bullish catalysts: a landmark legal resolution and rising anticipation for a spot XRP ETF. Yet, despite these positive developments, XRP has underperformed, even as broader crypto markets surge.

Over the three months leading up to May 22, XRP declined by 6%, while the overall cryptocurrency market cap rose by 10%. This divergence has left investors and analysts questioning: Why isn’t XRP responding to such strong tailwinds? To understand this anomaly, we need to examine market sentiment, derivatives activity, regulatory dynamics, and investor psychology.

Core Keywords

Bullish Catalysts Ignored: What Happened?

Two pivotal events in early 2025 were widely expected to ignite a major rally in XRP:

  1. Ripple’s Legal Victory Over the SEC
    On May 8, Ripple Labs reached a settlement with the U.S. Securities and Exchange Commission (SEC) after a prolonged legal battle over whether XRP qualifies as a security. The resolution cleared significant regulatory uncertainty, allowing Ripple to operate more freely in the U.S. financial ecosystem.
  2. XRP Included in U.S. Digital Asset Reserve Consideration
    On March 6, XRP was added to a shortlist of digital assets under review for inclusion in a potential U.S. national digital asset reserve. This move signaled growing recognition of XRP’s utility in cross-border payments and institutional finance.

👉 Discover how regulatory clarity could unlock the next phase of crypto growth.

Despite these developments, XRP failed to gain meaningful upward traction. The answer lies not in fundamentals—but in market structure and timing.

Derivatives Market Shows Hidden Strength

While spot price action appears sluggish, the derivatives market tells a different story. As of May 22, total open interest in XRP futures across major exchanges surged to 923 million XRP, worth approximately $2.2 billion, marking a 31% increase over just two weeks.

This spike in open interest suggests growing institutional and sophisticated trader participation. But high open interest alone isn’t inherently bullish—it can also reflect increased shorting activity. So how do we differentiate?

Enter the funding rate—a key metric in perpetual futures markets that reveals whether bulls or bears are paying premiums to maintain positions.

On May 22, the annualized funding rate for XRP futures climbed to 19%, near its six-month high. While this is far below the extreme 100% rate seen during the December 4, 2024 rally (when XRP jumped from $1.33 to $2.90 in one week), it still indicates strong bullish positioning.

A positive funding rate means long-position holders are paying short-sellers to keep their bets open—typically a sign of aggressive buying pressure and market optimism.

The current level suggests confidence is building but hasn’t yet reached euphoric levels. This could mean the market is setting up for a measured breakout rather than a volatile spike.

Why Isn’t the Market Reacting Faster?

Several factors explain the delayed reaction:

1. ETF Decision Still Pending

Although multiple asset managers have filed applications for a spot XRP ETF, the SEC’s final verdict isn’t expected until October 2025. Until then, large institutional investors remain cautious, waiting for formal approval before committing significant capital.

ETF speculation often drives prices before approval—but only when regulatory clarity supports it. In XRP’s case, while the lawsuit is resolved, the SEC hasn’t explicitly classified XRP as a non-security, leaving some ambiguity.

2. Limited Political Engagement

Despite Ripple CEO Brad Garlinghouse’s public appeal on May 19 for Senator Cynthia Lummis—chair of the Senate Banking Committee’s Digital Assets Subcommittee—to engage in dialogue, she has declined multiple meeting requests.

This lack of political momentum slows broader legislative progress and dampens immediate market enthusiasm. Without high-level advocacy, even favorable developments may fail to capture mainstream attention.

3. Market Rotation Dynamics

In 2025, capital has flowed heavily into other sectors—particularly AI-driven tokens and Layer 1 platforms like Solana. This rotation has temporarily sidelined assets like XRP, despite strong fundamentals.

However, historical patterns show that once broader market volatility stabilizes, capital tends to rotate back into established projects with clear use cases—exactly where XRP stands.

The Road Ahead: Can XRP Reach $3.50?

Many analysts maintain a bullish XRP price forecast, projecting a potential 45% rise to $3.50. Achieving this target would require:

With over $2.2 billion in futures open interest already in place, the infrastructure for a breakout exists. If positive news emerges—especially around ETF approvals—the market could see rapid re-rating.

Moreover, breaking above the all-time high of $3.25 could trigger algorithmic and momentum-based buying, pushing prices even higher.

Frequently Asked Questions (FAQ)

Q: Is XRP considered a security after the SEC settlement?
A: The settlement did not classify XRP as a security outright. Instead, it clarified that programmatic sales (to retail) are not securities, while institutional sales may be subject to regulation. This partial clarity has reduced legal risk significantly.

Q: When will we know if a spot XRP ETF is approved?
A: The SEC’s decision is expected around October 2025. Any approval would likely come after extensive review and public comment periods.

Q: Does high open interest mean a price surge is coming?
A: Not necessarily—but combined with rising funding rates and positive sentiment, it suggests growing conviction among traders. It increases the likelihood of a sharp move if catalysts align.

Q: Why hasn’t XRP rallied despite Ripple winning its case?
A: Markets often price in expectations early. Additionally, without immediate follow-up catalysts like ETF approval or major partnerships, momentum can stall even after legal wins.

Q: Can XRP reach $10 like some influencers claim?
A: While long-term potential exists, $10 is highly speculative and not supported by current fundamentals or adoption metrics. A more realistic near-term target remains $3.50–$4.00 under favorable conditions.

👉 See how ETF approvals have historically impacted crypto prices before making your next move.

Final Outlook: Patience Before the Breakout?

XRP’s recent price stagnation doesn’t reflect weakness—but rather consolidation ahead of potential catalysts. The combination of reduced regulatory risk, rising futures activity, and growing institutional interest creates a compelling setup.

While short-term traders may grow frustrated, long-term holders should view this period as accumulation phase—not failure.

With the SEC’s ETF decision on the horizon and Ripple expanding its global footprint, 2025 could still become the year XRP fulfills its bullish promise.

👉 Stay ahead of the next market shift with real-time data and deep insights.