XRP Ledger has exhibited significant resilience during recent market volatility despite overall trading volume being relatively low. The token’s price movements are highly Bitcoin correlated. XRP’s technicals indicate that the altcoin is destined to remain range-bound in the short to mid-term. It’s the approval of ProShares’ XRP ETFs that has really generated the most interest. Let’s be clear, these are futures-based ETFs, not spot ETFs which could limit real-world demand.

Read on to learn more about XRP’s position in the market today. It explores its price stability, trading dynamics, and the likely effects of the newly launched ProShares ETFs on the marketplace. It digs into the key differences between spot and futures ETFs. It underscores the need for the SEC to continue its independent review of spot XRP ETF applications.

XRP's Price Stability and Technical Outlook

In the face of larger market turmoil, XRP has held an unusual amount of independent stability in recent weeks. The trading volume is thin, which suggests a lack of directional conviction among investors. XRP’s price development continues to be closely correlated with Bitcoin, further underscoring the altcoin’s vulnerability to the fate of the top crypto.

From a technical analysis standpoint, the most probable scenario for XRP is to trend sideways in its current range on higher timeframes. Short-term volatility is possible in between major pivots, like $2.05 and $2.14. Intraday support near $2.20 looks like it’s going to hold, giving the price a floor in the short-term.

If the larger crypto market continues to remain calm, XRP may be in for a breakout. Bulls may push it to even higher resistance levels, potentially targeting $2.35 and $2.40. On the downside, a close below the current intraday support would open up more downside.

ProShares ETFs and Market Impact

ProShares is planning to release several new XRP-related Exchange Traded Funds (ETFs). These products consist of an Ultra XRP ETF with 2x leverage, a Short XRP ETF, and an Ultra Short XRP ETF that offers -2x leverage. These products allow investors to access XRP’s price action in multiple attractive ways.

It’s important to understand that these are futures ETFs—in this case, XRP futures contracts, not spot XRP. This distinction is important, since futures ETFs don’t actually require the purchase or holding of physical XRP tokens at all.

"A Spot ETF buys and holds real XRP, creating real demand. A Futures ETF only bets on XRP’s price without touching a single real token." - John Squire [@TheCryptoSquire]

The difference between spot ETFs and futures ETFs is key. A spot ETF simply buys the underlying asset and holds it, which in this example would be XRP. This creates an increase in demand, which can increase the price considerably. A futures ETF means you’re placing a wager just on the future price of XRP. There are no tokens you need to buy to join in on the fun, either. Teucrium debuted the US’s first XRP futures ETF, XRPient, drawing in more than $5 million in first-day trading volume.

SEC Review of Spot XRP ETF

ProShares’ ETFs use derivatives to provide exposure to XRP. More importantly, the possible approval of a spot XRP ETF could be the biggest catalyst for the token’s valuation. Unlike contracts for difference, a spot ETF would directly buy and hold XRP itself, creating real demand for XRP and possibly influencing its price in a more substantial manner.

As for the SEC, it’s still in the process of considering applications for spot XRP ETFs, with a crucial ruling expected by May 22. That said, the result of this review is poised to have a significant effect on XRP’s trading environment.

XRP’s total supply is capped at 21 billion tokens. These tokens are purposefully set aside for marketing, liquidity, community rewards, staking, and token burns. Together, these allocations are smart plays to promote a robust ecosystem.