XRP’s Bearish Outlook Continues with 10% Price Drop After SEC Appeal and ETF Filing

XRP faced a sharp 10% decline as renewed regulatory concerns overshadowed recent optimism surrounding an ETF filing. The options market for XRP signals further potential price drops, indicating a stronger bearish sentiment.

Asset manager Bitwise filed an S-1 form with the U.S. Securities and Exchange Commission (SEC) on Monday, seeking approval for an exchange-traded fund (ETF) that would invest in XRP. This follows the successful launch of Bitcoin and Ether spot ETFs earlier in the year, which attracted billions in investment.

However, hopes for XRP bulls were dashed when the SEC quickly followed Bitwise's submission with an appeal notice. The SEC is contesting a previous ruling by Judge Analisa Torres, who decided that Ripple Labs' programmatic sales of XRP to retail exchanges did not breach securities laws. The SEC's appeal now sends the matter to the Second Circuit Court of Appeals.

Ripple, the company behind XRP, was accused by the SEC four years ago of selling $1.3 billion worth of unregistered securities. While Ripple aims to create a global payments network, XRP functions as an independent digital asset used in online transactions and currency exchanges. A classification of XRP as a security could have serious implications, as securities face stricter regulatory oversight compared to commodities.

Over the past 24 hours, XRP has dropped by 11% to 53.7 cents, bringing its weekly loss to over 16%, making it one of the worst performers among the top 100 cryptocurrencies by market capitalization. Bitcoin and Ether have seen smaller losses of 0.5% and 3.7%, respectively.

Bearish Options Sentiment XRP’s options market shows a negative seven-day call-put skew of -3.2%, signaling greater demand for put options, which provide protection against price declines. In contrast, Bitcoin and Ether have neutral or positive skews, showing a less bearish outlook. The data comes from Amberdata, indicating that traders are bracing for more downside in XRP’s price.

On the other hand, XRP’s perpetual futures market saw funding rates flip back into positive territory, following a brief negative period that reflected bearish sentiment.