Canary Capital files for XRP ETF

Ripple price today: $0.530

• Ripple is approaching $0.530 on Wednesday, technicals point to a downside ahead.
• Canary Capital has officially filed for an XRP ETF with the US SEC.
• XRP’s long-short ratio is trading below one, suggesting a bearish move on the horizon.

Ripple (XRP) is stabilizing around $0.530 on Wednesday after facing a rejection of its daily resistance level on Monday. Canary Capital’s official filing for an XRP Exchange Traded Fund (ETF) with the US Securities and Exchange Commission (SEC) is generally a positive development. However, technical analysis and on-chain metrics point to a potential near-term correction for Ripple.

Canary Capital files applications for Ripple ETF with US SEC

Canary Capital officially filed for an XRP ETF with the SEC on Tuesday, following a similar move by Bitwise last week. Despite ongoing regulatory challenges, ETF additions by major investment firms are generally positive signs for Ripple in the long term, as an ETF can make it easier for traditional investors to gain exposure to XRP without having to buy and store cryptocurrency directly. Additionally, the approval of an ETF could give XRP more legitimacy and increase liquidity.

However, Ripple’s on-chain metrics from Coinglass suggest a near-term correction for XRP. Its long-short ratio is trading at 0.9, a one-month low. This below one ratio reflects bearish sentiment in the market as more traders are betting on the asset price to fall. Other stocks in the chain, as we saw in a previous article, also support the bearish scenario.

XRP Long-Short Ratio Chart. Source: Coinglass

Ripple Price Forecast: XRP Faces Resistance Barrier Rejection

Ripple price is stabilizing after falling below an uptrend line last week and was rejected from the daily resistance level of $0.544 on Monday. This daily level roughly coincides with the two crucial resistance levels: the 200-day EMA at $0.554 and the previously broken uptrend line (drawn by connecting multiple early July lows). At the time of writing on Wednesday, XRP/USDT is trading at around $0.532.

If the $0.544 level continues to hold as resistance, XRP could drop more than 19% from its current trading level to retest the August 5 low of $0.431.

The Relative Strength Index (RSI) indicator on the daily chart is also trading below its neutral level of 50, indicating bearish momentum and continuing the downtrend.

XRP/USDT Daily Chart

However, if XRP breaks and closes above the 200-day EMA at $0.554, it could extend the rally by 13% to retest the next daily resistance at $0.626.