XRP Today News: Yen arbitrage trading collapsed, dragging down to a critical fall below 2 USD.

Today's news on XRP shows that the market is under pressure, with XRP experiencing a big dump to a low of $2.05. At the same time, Bitcoin has fallen below $90,000, dragging the entire market down significantly. In November, BTC spot ETF outflows reached $3.47 billion, indicating a decrease in institutional demand. The market's expectations for interest rate cuts by The Federal Reserve (FED) and interest rate hikes by the Central Bank of Japan are intensifying, increasing the risk of Close Position in yen arbitrage trading, which in turn affects risk assets.

Yen Arbitrage Trading Risks: Forex Storm Drags XRP Below 2 USD

(Source: Trading View)

Bitcoin fell 3.39% to $87,337 in early trading, while XRP's news today shows it dropped 3.35% to $2.0834. The USD/JPY fell 0.30% to 155.666 in early trading, putting pressure on market risk appetite. The movement of USD/JPY may significantly impact the buying demand for Bitcoin and the entire cryptocurrency market.

Economists are betting that the Federal Reserve will cut interest rates in December, and the Bank of Japan will raise interest rates, leading to a decline in the USD/JPY exchange rate. It is noteworthy that the Federal Reserve will end its Quantitative Tightening (QT) policy on December 1, which will narrow the interest rate differential between the US and Japan, benefiting the appreciation of the yen. If the Federal Reserve cuts interest rates while ending the QT policy, and the Bank of Japan raises interest rates, the USD/JPY exchange rate may further test around 140.

Under normal circumstances, significant fluctuations in exchange rates will trigger margin call notifications, forcing traders to close their yen arbitrage positions. Arbitrage trading refers to borrowing a financial instrument with a low interest rate to purchase another financial instrument or risk asset with a higher interest rate, which typically yields higher returns. The closing of arbitrage trades will affect risk assets and further push up the yen exchange rate.

As background, the Bank of Japan reduced its purchases of Japanese government bonds and raised interest rates in July 2024. This policy adjustment coincided with the dovish policy outlook of the Federal Reserve, triggering the close position of yen arbitrage trades. As a result, the USD/JPY exchange rate fell sharply from 161.951 to 139.576. The price of Bitcoin dropped from a high of $69,912 before the Bank of Japan's decision to a low of $49,351, as traders sold off risk assets to pay back yen loans. Looking ahead to December 2025, XRP traders will face similar risks, supporting their short-term bearish outlook.

This kind of forex-driven risk is extremely critical for today's news on XRP. As a cross-border payment token, XRP's value proposition is closely related to the forex market. When the global forex market experiences significant volatility due to the divergence of Central Bank policies, XRP cannot remain unaffected. Worse yet, the Close Position of yen arbitrage trading will directly reduce the funds flowing into the cryptocurrency market, which puts pressure on all risk assets.

BlackRock Stays Put: XRP ETF Attracts Far Less Capital Than Expected

The most disappointing news about XRP today is the weak inflow of funds into the ETF. Given the risks of arbitrage trading with the Japanese Yen and the weakening institutional demand for the XRP Spot ETF, the short-term bearish outlook remains unchanged. Since its launch, the inflow of funds into the XRP Spot ETF has been $666.61 million, which is lower than the inflow amount when the BTC Spot ETF was launched, putting pressure on market sentiment. Analysts had previously anticipated that the suppressed institutional demand would drive stronger inflows, but reality has fallen far short of expectations.

It is worth noting that although Franklin Templeton is the 19th largest ETF issuer by assets under management, the Franklin XRP ETF (XRPZ) has only recorded $85.22 million in inflows since its launch. The Canary XRP ETF (XRPC) leads with a first-mover advantage, with inflows reaching $343.67 million. However, $243.05 million of those inflows occurred on the first day of trading, indicating that its advantage is waning.

The most critical point is that BlackRock remains inactive. As the world's largest asset management company, BlackRock's iShares series ETFs often serve as a market barometer. BlackRock's Bitcoin ETF (IBIT) has an asset size close to 100 billion USD, proving its appeal in the crypto ETF market. However, BlackRock has yet to launch an XRP ETF, and this absence is interpreted by the market as a signal of insufficient demand for XRP. If BlackRock continues to remain inactive, the fund inflow for the XRP ETF may continue to be weak.

XRP ETF Fund Flow Analysis

Total Inflow: 66.661 million USD (below expectations)

XRPC (Canary): $343.67 million (first day $243.05 million, subsequent weakness)

XRPZ (Franklin): $85.22 million (far below its AUM scale)

BlackRock: Not launched yet (largest gap)

Technical Analysis and Market Structure Proposal: $1.82 Lifeline

(Source: Trading View)

On November 30, XRP fell by 2.08%, closing at $2.1557. The token's decline was greater than the overall market. Following a drop on Sunday, XRP retreated from the 50-day and 200-day exponential moving averages, reaffirming the bearish trend. Current XRP news shows the price has fallen below $2.10, with the technical structure further deteriorating.

Key technical levels to watch include: support levels at $2, $1.9112, and $1.8239; resistance at the 50-day moving average of $2.3383; resistance at the 200-day moving average of $2.5071; higher resistance levels at $2.2, $2.35, $2.5, $2.62, $2.8, $3.0, and $3.66. The current price is just a step away from the psychological level of $2; if it falls below this, it will open up a downward space towards $1.82.

Despite the short-term outlook remaining pessimistic, the medium-term outlook is relatively optimistic. Several events, including the progress of the “Market Structure Bill” on Capitol Hill and the Federal Reserve's interest rate decision, will be crucial. On July 17, 2024, after the House submitted the bill to the Senate, the price of XRP rose by 14.69%. If the Senate ultimately passes the bill, XRP is expected to attract a broader group of investors, thereby boosting its price.

U.S. cryptocurrency show host Eleanor Terrett shared the latest updates from Capitol Hill: “I just got off the phone with an industry insider who recently met with a group of Senate Democrats working on market structure legislation. This person said one member pointed out that they are preparing to consider a bipartisan market structure bill during the week of December 8.”

The delay in the legislative process for cryptocurrencies has caused XRP to retreat from its historical high of $3.66 set in July. However, bipartisan support for the Market Structure Bill and progress in the January vote may boost market sentiment, thereby supporting a bullish outlook in the medium term (4-8 weeks). If the bill makes substantial progress in the week of December 8, it could become a key catalyst to reverse the short-term downtrend.

Bearish and Bullish Scenarios: Key Events Determine Direction

The most important news regarding XRP today is two extreme scenarios. In a bearish scenario, if the following events occur, XRP may fall below the psychological support level of 2.0 USD: XRP Spot ETF reports net capital outflow; the U.S. Senate postpones the “Market Structure Bill”; MSCI removes DATs from the index; blue-chip companies do not consider XRP as a treasury reserve asset; the U.S. Office of the Comptroller of the Currency delays or rejects Ripple's application for a U.S. chartered bank license; U.S. economic data suppresses The Federal Reserve (FED) rate cut expectations for December.

After breaking below $2.0, the support level of $1.9112 will become the next key defense line. If this support level is breached, the low of $1.8239 on November 21 will become the last bastion. The decline space from the current price to $1.82 is about 11%, and for traders holding long positions, it is appropriate to set the stop-loss at $1.8239.

The bullish scenario requires the following catalysts: BlackRock launches the iShares XRP Trust, showing strong institutional demand; The Federal Reserve (FED) lowers interest rates in December and hints at further cuts in the first quarter of 2026; MSCI continues to include DATs in its product line; The Senate passes the Market Structure Bill; Blue-chip companies purchase XRP for reserve funds. These events are likely to drive XRP to new highs. If it breaks through the historical high of $3.66 set in July, the token is expected to move towards $5.

XRP Key Risks and Opportunities Comparison

bearish factors

· The risk of closing position in Japanese Yen arbitrage trading continues.

· ETF fund inflows are weak, BlackRock is absent

· The legislative process may stagnate

· The narrowing of the US-Japan interest rate differential impacts liquidity

Bullish Factors

· The Market Structure Bill may be reviewed on the week of December 8.

· The Federal Reserve (FED) interest rate cut expectations

· Ripple applies for a US chartered bank license

· Institutional long-term allocation demand

In summary, the short-term outlook remains pessimistic, while the medium to long-term outlook is relatively optimistic. XRP will face a critical moment this week, with the risks of yen arbitrage trading intertwined with weak institutional demand for cryptocurrency spot ETFs. The narrowing of the interest rate differential between the U.S. and Japan, along with the stagnation of market structure legislation, could weaken market sentiment and potentially push XRP towards $1.9112 or even $1.8239.