The U.S. is set to welcome its first Ripple (XRP) exchange-traded fund (ETF) on April 8th, offering investors twice-daily exposure to price moves without directly owning the crypto asset. The Teucrium 2x Long Daily XRP ETF (XXRP) seeks to provide investors with daily returns that correspond to two times the daily price performance of XRP for a single day. While the debut of this ETF could potentially increase XRP’s exposure to investors, market participants remain cautious following recent sell-offs.
The ETF will be based on swaps rather than futures, with swaps being traded privately through OTC providers to limited investors. This distinction in models could limit accessibility but may still attract more interest in XRP from investors. Additionally, the SEC’s dismissal of Ripple’s lawsuit has heightened expectations for a potential approval of a U.S. spot XRP ETF by 2025. Despite the positive outlook, social interest in XRP surged leading up to the launch of the ETF, but overall sentiment towards the altcoin remained negative, with retail investors displaying caution in the short term.
Derivative and spot market indicators have shown weak demand for XRP in April, with both Cumulative Volume Delta (CVD) and Open Interest (OI) indicators trending downwards. Recent exchange inflows also indicated that short sellers were still present in the market, posing potential risks for the altcoin. While XRP had a bearish market structure with lower lows in its price chart, bulls stepped in to support the asset near the 200-day Simply Moving Average (SMA). However, a break below the 200-day SMA and trendline support could expose XRP to further downside risk, potentially dropping to $1.5.
In conclusion, the launch of the first U.S. XRP ETF is a significant development for the cryptocurrency market, offering investors a new way to gain exposure to price moves without directly owning the asset. Despite the cautious sentiment among market participants following recent sell-offs, the debut of the ETF could help increase XRP’s visibility and attract more interest from investors. However, the altcoin still faces challenges such as weak demand indicators and potential short selling pressure, which could impact its price in the short term. As the market awaits the potential approval of a U.S. spot XRP ETF in the future, the overall sentiment towards XRP remains mixed, with both positive and negative factors influencing the asset’s price trajectory.
