XRP Breaks Out on Clarity Act Hopes, but Charts Call for Caution
XRP gained 3.25% to reach $1.1485 on Monday, making it the third-best performer among the 50 largest cryptocurrencies. What sparked the move? Reports that President Donald Trump had accepted an ethics provision in the stalled Clarity Act. If Congress passes the bill, XRP could be formally classified as a digital commodity, clearing up a regulatory problem that has kept some institutional investors away for years. My take: that possibility matters more than Monday’s percentage gain.
Crypto had a good Monday overall. Reports late in the day said Trump had accepted the ethics provision holding up the Clarity Act in the Senate after months of talks. Bitcoin climbed above $66,000. Five days of inflows into spot ETFs exceeded $700 million. Gains in Asian AI and semiconductor stocks also encouraged traders to take more risk. Almost every major digital asset rose, but XRP did better than most.
The Ripple-linked token had lagged behind the wider market recovery, repeatedly failing to clear $1.13—a level that had stopped every rally since late June. Then it broke through. XRP reached an intraday high of $1.1511 and held a market value of about $68 billion. The rally liquidated roughly $2.93 million in leveraged short positions before XRP settled at $1.1485, up about 3.5% during the session. Among the top 50 tokens, only Ondo and Cardano posted larger gains. I’ll be honest: that is a meaningful breakout, just not proof of a new trend.
The political news carries more weight for XRP than for many other tokens. The Clarity Act could classify it as a digital commodity, answering some of the regulatory questions that have weighed on institutional demand. Investors have wanted a clearer answer for years. Most bullish readings stop there. That is only half right. Trump’s reported acceptance of the ethics clause could restart Senate talks, but the bill still has a long way to go.
Senate Democrats have spent months seeking language that would stop the president and his family from profiting directly from cryptocurrency businesses. Since Trump returned to office in January 2024, his family has participated in several crypto ventures. Those businesses reportedly brought the president more than $1.2 billion in 2025 alone. That figure changes the politics.
The White House and Senators Cynthia Lummis and Bernie Moreno reportedly agreed on the provision Sunday. The exact wording has not been released. Democrats could still reject it. That is no minor detail. Polymarket traders lifted the odds of the Clarity Act passing to 43%, up from a recent low of 32%. Is the market getting ahead of itself? Possibly, because the Senate must also act before its August recess, and the calendar is getting tight.
XRP’s reaction shows how quickly political news can move a token that has spent years under SEC scrutiny. Still, one encouraging report does not settle the bill’s wording or win Democratic support. It does not secure a Senate vote, either. Counter to the usual headline logic, traders are not responding to a law already on the books. They are betting that regulatory pressure may ease.
Monday’s daily candle looks strong. The indicators behind it tell a shakier story. XRP’s Average Directional Index, or ADX, stands at 12.3, well below the 25 level traders commonly use to confirm a trend. ADX measures the strength of a move, not its direction. Why does that matter? Because a reading of 12.3 suggests that neither buyers nor sellers are firmly in charge, even though the earlier bearish trend is losing force quickly. I would treat that mismatch seriously.
The breakout has some energy behind it. The positive and negative directional indicators, DI+ and DI-, have tilted bullish, though only by a narrow margin. I would not call that confirmation on its own. XRP’s 50-day exponential moving average also remains below its 200-day average, a pattern known as a death cross. These averages smooth price data across different periods; with the shorter average still below the longer one, the medium-term trend remains downward. One busy Monday cannot undo that. For the broader chart to look convincingly bullish, the 50-day EMA needs to move back above the 200-day EMA.
The Relative Strength Index looks healthier. At 58, the RSI suggests buying pressure is beating selling pressure without approaching the overbought threshold of 70. The Squeeze Momentum Indicator triggered two bars ago, suggesting volatility is expanding after a quiet period. Buyers will like that. But here is the catch: a squeeze can break in either direction. The next few sessions should show whether they can defend Monday’s move.
A daily close above $1.1343, paired with a rising ADX, would bring $1.1563 into sight. That price marks the 78.6% Fibonacci level. If XRP fully recovers its recent swing, $1.1843 would be next. Momentum fading would change the setup: the price could fall toward $1.1189, followed by support at $1.1035. Yes, that caution cuts against the excitement around the breakout. I would still watch those exact levels before deciding that one day’s jump has changed the trend.
What this means
XRP’s rally suggests traders see money in the prospect of clearer regulation. Commodity status could lower the token’s legal risk and make it easier for institutions to buy or hold. At the moment, though, the market is responding to a possible deal. The bill has not passed. The public has yet to see the disputed ethics language. In my view, those two gaps leave plenty of room for a reversal.
Keep an eye on the Senate as the August recess gets closer. A vote could move XRP hard in either direction; publication of the proposed wording could do the same. On the chart, bulls need to keep XRP above $1.1343 at the daily close. That would make $1.1563, the 78.6% Fibonacci level, the next target. After that comes $1.1843. If the breakout fails, $1.1189 returns to focus, with $1.1035 beneath it.
The next few trading sessions should settle the argument. Is waiting for volume and ADX confirmation overly cautious? No. If volume holds up and ADX starts to rise, Monday’s breakout could keep running. If both remain weak, the move may prove to be another short-lived rush after a political headline. We have all watched that movie before.