Ripple Price Forecast: How the SEC could fast-track approval of XRP ETFs

• XRP steadies recovery above the 100-day EMA as bulls eye breakout beyond $3.00.
• Proposals to fast-track ETF approvals could increase the chances of an SEC green light for XRP ETFs.
• XRP meets two of the three approval conditions under the new criteria, along with Solana.

Ripple (XRP) maintains above a critical support level on Tuesday, buoyed by subtle tailwinds in the broader cryptocurrency market. A breakout above the $3.00 psychological level, followed by a rise to its record high of $3.66, is on the cards, backed by optimism for the approval of Exchange Traded Funds (ETFs) in the fourth quarter.

Fast-tracking crypto ETFs approvals 

Cboe’s BZX exchange, NASDAQ, and NYSE Arca filed 19b-4 forms with the United States (US) Securities and Exchange Commission (SEC), proposing amendments to the current crypto ETFs listing standards. 

The filings on July 30 came amid an influx of capital into existing Bitcoin (BTC) and Ethereum (ETH) spot ETFs. However, the SEC is sitting on over 90 crypto ETF proposals, according to Bloomberg analyst James Seyffart, creating a burdensome backlog.

A 19b-4 filing is a document used by self-regulatory entities, such as exchanges, to propose rule changes to the SEC. 

The SEC has historically extended the ETF approval process to the maximum deadline of 240 days, significantly delaying new listings. However, with the proposed rule change, the SEC could fast-track the approval process amid a growing number of crypto ETF applications.

Cboe’s BZX exchange, NASDAQ, and NYSE Arca rule change proposal culminates in a three-condition listing criteria. According to a report by Galaxy Research, the first condition is that “the commodity trades on a market that is an Intermarket Surveillance Group (‘ISG’) member.” 

The second condition provides that “the  commodity underlies a futures contract that has been made available to trade on a designated contract market for at least six months.” 

The third condition provides that the “ETF is designed to provide economic exposure of no less than 40% of its net asset value to the commodity lists and trades on a national securities exchange.” This applies only on an initial basis.

Based on the three-condition criteria, 10 tokens qualify for expedited listing, including Dogecoin (DOGE), Bitcoin Cash (BCH), Litecoin (LTC), Chainlink (LINK), Stellar (XLM), Avalanche (AVAX), Shiba Inu (SHIB), Polkadot (DOT),  Solana (SOL), and Hedera Header (HBAR).

XRP and Cardano (ADA) are expected to meet the new listing criteria on September 20 and October 1, respectively, as they will have been trading on a designated contract market (DCM) for six months following their initial listing date.

Qualifying tokens | Source: Galaxy Research

Several organizations have already submitted comment letters to the SEC in response to the expedited listing criteria. The Digital Chamber and investment advisor Multicoin Capital Management both agree on a minimum market capitalization of $500 million and at least $50 million in trading volume over the last six months of trading.

“By adopting a comparable fast-track process, anchored in objective criteria, the SEC can manage the growing backlog of applications, provide clarity to issuers, and expand regulated access to digital assets,” Galaxy Research added in the report.

XRP stands to qualify for the expedited listing process, which would significantly increase the chances of ETF approval with the SEC. Exposure to alternative capital sources could enhance its legitimacy as an asset class and bolster the bullish case.

Technical outlook: XRP bulls defend key support 

XRP price remains above the 100-day Exponential Moving Average (EMA) support at $2.76 as bulls aim at a breakout above the psychological resistance at $3.00. A reversal of the Relative Strength Index (RSI) at 41 on the daily chart backs the short-term bullish outlook. 

If the RSI steadies the uptrend above the midline, the path of least resistance would remain upward, indicating an increase in buying pressure. A break above the $3.00 hurdle could also boost risk-on sentiment, as bulls target a breakout toward the record high of $3.66 reached on July 18.

XRP/USDT daily chart

Still, traders should exercise caution when managing risk, as the Moving Average Convergence Divergence (MACD) indicator has maintained a sell signal since July 25. Losing the 100-day EMA support at $2.76 might accelerate the decline toward the 200-day EMA at $2.51.