U.S. Senate Agriculture Committee announced a draft of the "Market Structure Bill" on January 21, but Chairman John Boozman stated that the lack of Democratic support has increased legislative uncertainty for cryptocurrencies. Despite Trump’s withdrawal of tariffs on Europe boosting the market, XRP still fell back to $1.92, breaking below the 50-day and 200-day moving averages. Traders see $2 as a key level; a breakout could open the way toward the target channels of 3.0 and 3.66 USD.
Trump’s Tariff Reversal Briefly Boosts Market Before Legislative Delay
On January 21, President Trump withdrew the threat of a 10% tariff on eight European NATO member countries, easing fears of a full-scale trade war. Following this news, XRP’s price rebounded near a key support level, briefly rising to $1.98. This rebound indicates the market’s high sensitivity to macro risk events; the easing of trade tensions reduced risk aversion, prompting funds to flow back into risk assets.
However, the urgently needed U.S. cryptocurrency legislation continues to be delayed, putting pressure on market sentiment. Last week, the Senate Banking Committee postponed a voting, causing XRP’s price to decline. This week, due to lack of bipartisan support, the Senate Agriculture Committee announced a draft of the "Market Structure Bill," signaling further delays in the crypto legislation process. XRP is highly affected by developments in crypto-related legislation, as a clear regulatory framework would eliminate major concerns for institutional investors.
On Thursday, January 22, XRP fell 1.24%, partially retracing the 3.13% gain from the previous day, closing at $1.9221. The token’s decline was greater than the overall crypto market, which fell 0.11%. This relative weakness shows XRP is under additional specific pressure, not just following the broader market trend.
Recent declines have caused XRP’s trading price to break below the 50-day and 200-day moving averages, indicating a bearish bias. However, bullish fundamentals continue to offset bearish technicals, confirming a positive market outlook. This divergence between technical and fundamental factors is a key feature of the current XRP market.
Legislative Delay Due to Lack of Bipartisan Support
On January 21, the Senate Agriculture Committee released the draft text of the "Market Structure Bill," two days ahead of the January 23 deadline. However, Chairman John Boozman stated that the draft lacks Democratic support and pointed out:
“I appreciate Senator Booker and his team working with us and providing many insightful suggestions in advancing consumer protection and empowering the CFTC with new authority. While there are still disagreements on some fundamental policy issues, this bill is based on a bipartisan draft that incorporates input from various stakeholders and reflects months of collaboration.”
Market disappointment with Boozman’s comments and the Democratic Party’s stance on the bill is evident. Bitcoin (BTC) investor Wayne Vaughan joked on X: “Democrats are trying to kill crypto.” Others pointed out that, given the lack of bipartisan support for the draft, the January 27 hearing may result in no outcome.
U.S. crypto program host Eleanor Terrett shared the latest developments on crypto legislation, saying: “Therefore, the bill text has now effectively become a Republican product, with no Democrat publicly supporting it in the committee. This means next Tuesday’s hearing may lead to the bill passing along party lines, contrasting sharply with the House Agriculture Committee’s bill, which passed with overwhelming bipartisan support of 47 to 6.”
Despite partisan differences, reports indicate that New Jersey Democrat Senator Cory Booker will continue working with Boozman to push the bill through and have it signed into law. However, the delay in the Senate Banking Committee could last a long time. Eleanor Terrett stated: “Unfortunately for the industry, last week’s brief window may be the last chance to complete committee review before late February or early March.”
This background follows Coinbase’s withdrawal of support for the Banking Committee’s "Market Structure Bill" draft, which led to the postponement of the review. Coinbase CEO Brian Armstrong pointed out several issues in the draft, including regulation of stablecoin yields. Due to potential impacts on net interest margins and profits from depositor funds outflows, U.S. banks have opposed legislation allowing stablecoin yields.
Key Technical Levels and Analysis for $2
(Source: Trading View)
Traders regard $2 as a critical level; a breakout above this could open the path toward targets of 3.0 USD and 3.66 USD. After successfully avoiding a fall below $1.85 during the January correction, returning above $2 is crucial for the medium-short-term outlook. As mentioned, bullish fundamentals continue to offset bearish technicals, indicating a short-term rebound. XRP rebounded from December’s low of $1.7712 and gained 4.23% in January, further strengthening its bullish structure and short-term price expectations.
Key Technical Levels to Watch
Support levels: $1.85, $1.75, $1.50
50-day moving average resistance: $2.0473
200-day moving average resistance: $2.2994
Upper resistance levels: $2.0, $2.5, $3.0, $3.66
On the daily chart, breaking above $2.0 would give bulls a chance to challenge the 50-day moving average. Continued breakout above the 50-day MA would signal a short-term bullish trend reversal. Additionally, a bullish trend reversal would make $2.2 a potential target. Breaking above $2.2 would open the door to test the 200-day moving average. Sustained breakout of EMA averages would reinforce medium- to long-term bullish price targets.
Breaking above $2.0 would pave the way for an upward trendline. Continued breakout of the upward trendline would confirm a bullish trend reversal and validate the bullish structure. However, if the price continues to fall below the downward trendline and drops below $1.85, the bullish structure would be invalidated, indicating a bearish trend reversal.
Medium- and Long-term XRP Targets and Risks
Despite setbacks from legislative developments, XRP’s medium-term outlook remains optimistic. Key bullish factors include inflows into XRP spot ETFs, increased utility of XRP, and market expectations that the Senate will ultimately pass the "Market Structure Bill." Strong demand for XRP spot ETFs and enhanced utility support a positive short-term (1-4 weeks) outlook, with a target of $2.5.
XRP Price Target Path
Short-term (1-4 weeks): $2.5
Medium-term (4-8 weeks): $3.0
Long-term (8-12 weeks): $3.66
Super long-term (6-12 months): $5.0
However, some factors could challenge this optimistic outlook. The Bank of Japan announced a hawkish neutral interest rate (possibly between 1.5%-2.5%), implying multiple rate hikes ahead. Higher neutral rates could trigger yen carry trades to unwind, a scenario seen in mid-2024. The Bank of Japan will announce monetary policy on January 23. The further delay in the legislative process and outflows from XRP spot ETF reports could also exert downward pressure on prices.
These factors will pressure risk assets, potentially causing XRP to fall below $1.85, signaling a reversal of the bearish trend. Looking ahead, U.S. economic data and XRP ETF fund flows will influence near-term price prospects. Market expectations of a Fed rate cut in the first half of 2026 and a dovish stance by the Bank of Japan are likely to boost market sentiment.
In summary, the U.S. Senate passing the "Market Structure Bill" will solidify a long-term target of $3.66. A breakout above $3.66 could see the target price reach $5 within 6 to 12 months.
