Clarity Act Procedural Vote Fails: XRP Plunges Over 9%, Will It Test $1 Next?

TradingKey - Stall of the CLARITY Act triggers sell-off, with XRP plunging over 9% and highly likely to probe $1.

On September 16, the failure of the procedural vote on the CLARITY Act triggered a broad crypto decline, with major coins such as Bitcoin (BTC), Ethereum (ETH), BNB (BNB), and Solana (SOL) falling 3-5%, while XRP, as one of the crypto assets most sensitive to regulatory boundaries, exhibited greater downside elasticity than BTC, with its single-day decline expanding to over 9%.

Why did XRP react so intensely to the bill's stall? XRP has long been plagued by regulatory troubles due to its prolonged lawsuit with the SEC. The CLARITY Act was originally seen as the ultimate solution to delineate the responsibilities of the SEC and CFTC and grant XRP a clear commodity classification. The bill's stalled vote means the continuation of a regulatory gray area, prompting institutional funds that previously positioned for compliance expectations to take profits or cut losses to hedge risk.

Expressing deep regret over the bill's setback, Ripple CEO Brad Garlinghouse posted on social media platform X today, stating, 'It is heartbreaking that the CLARITY Act failed to pass a critical procedural vote. Our team poured everything into pushing the bill across the finish line, as did most of the industry.'

Currently, XRP's price has fallen below $1.30, a support level that will turn into resistance curbing its price advance, while significantly raising the probability of testing the psychological $1 mark. However, Bitcoin's price briefly dipped below $75,000 this morning before quickly pulling back above it, indicating that the impact of the CLARITY Act's rejection on the crypto market remains controllable, and there is still a possibility that XRP could reclaim $1.30.

XRP price chart, Source: TradingView

Currently, the market is focusing on the upcoming Federal Reserve interest rate decision. If it raises rates by 25 basis points as expected, XRP's upward momentum will be dampened, fluctuating downward to seek the $1 line of defense. However, if the Fed keeps interest rates unchanged, XRP will gain upward momentum, with a strong likelihood of reclaiming the $1.30 support level. In the event of an unexpected rate cut, XRP could even sprint to $1.70, though this possibility is extremely low.