XRP Breaks Resistance on Clarity Act Deal, Technicals Cautious
XRP surged past a key resistance level on reports of a political breakthrough for the Clarity Act, though structural bearish signals suggest the rally may not yet be sustainable.
XRP gained 3.25% to settle at $1.1485 on Monday, breaching a $1.13 resistance level that had capped the token since late June. The rally pushed the Ripple-linked asset to an intraday high of $1.1511, triggering roughly $2.93 million in leveraged short liquidations.
The move was driven by reports that President Donald Trump agreed to an ethics provision stalling the Clarity Act in the Senate. The legislation is particularly significant for XRP because it would formally classify the token as a digital commodity. This classification would strip away the regulatory ambiguity that has suppressed institutional demand for years.
Democrats had demanded language barring the president and his family from directly profiting from crypto ventures, businesses that netted Trump more than $1.2 billion in 2025. The White House, Senator Cynthia Lummis, and Senator Bernie Moreno reportedly reached a deal on Sunday, though the exact text remains unrevealed. The Senate must vote before its August recess, leaving a narrow window for passage that pushed Polymarket odds from 32% to 43%.
XRP outperformed most of the market, ranking third among the top 50 crypto assets behind Ondo and Cardano. The broader risk-on sentiment lifted Bitcoin above $66,000 and drove five-day spot ETF inflows past $700 million, supported by a bounce in Asian AI and semiconductor stocks.
Despite the fundamental catalyst, technical indicators urge caution. The token's 50-day exponential moving average remains below its 200-day average, a bearish formation known as a death cross. Furthermore, the Average Directional Index sits at 12.3, well below the 25 threshold required to confirm a new trend, indicating that while the downtrend is weakening, bulls have not yet taken structural control.
Volatility appears to be expanding, with the Squeeze Momentum Indicator firing recently. For the rally to hold, XRP needs a daily close above $1.1343, which would target $1.1563 and eventually $1.1843. Conversely, a rejection could send the price back to support levels at $1.1189 and $1.1035.
