XRP Faces Extended Bearish Trend Amid SEC Appeal and ETF Uncertainty

XRP (XRP) remains under heavy selling pressure as recent regulatory developments continue to overshadow market optimism. Despite a recent filing for an XRP exchange-traded fund (ETF) by asset manager Bitwise, the market’s outlook has been clouded by the U.S. Securities and Exchange Commission’s (SEC) decision to appeal a favorable court ruling for Ripple Labs.

On Monday, Bitwise filed an S-1 form with the SEC, seeking approval for an ETF tied to XRP. This move was expected to mirror the success of Bitcoin and Ether spot ETFs, which have drawn billions in investment since their launch earlier this year. However, the SEC’s swift appeal against Judge Analisa Torres’ decision that Ripple’s programmatic sales of XRP to retail exchanges did not violate securities laws has dampened market sentiment.

Ripple, the fintech company behind XRP, has been embroiled in a legal battle with the SEC since 2020, when the regulator accused the firm of selling $1.3 billion in unregistered securities. If XRP is classified as a security, it could face more stringent regulations, increasing the need for transparency and reporting—factors that tend to negatively impact investor sentiment.

As a result, XRP’s price has dropped by 11% in the past 24 hours, falling to 53.7 cents, with a week-to-date loss exceeding 16%, according to data from CoinDesk and CoinGecko. This places XRP among the worst-performing cryptocurrencies in the top 100 by market value. In comparison, Bitcoin and Ether have seen smaller declines of 0.5% and 3.7%, respectively.

In the options market, traders have become more bearish on XRP than on Bitcoin or Ether. The seven-day call-put skew for XRP stands at -3.2%, indicating a preference for protective puts, according to data from Amberdata. By contrast, Bitcoin and Ether show more neutral to slightly bullish sentiment with skews of 0% and 2.8%.

Meanwhile, in the XRP perpetual futures market, funding rates briefly turned negative, signaling bearish bias. However, they have recently flipped back to positive, hinting at short-term optimism among traders.

Despite this slight recovery, the broader uncertainty surrounding the SEC’s appeal and potential regulatory hurdles continues to weigh heavily on XRP’s price outlook. Until there is more clarity on the legal front, XRP’s prospects are likely to remain under pressure, with traders and investors remaining cautious.