XRP Faces Binary Setup Between CLARITY Act Upside and Sub-$1 Risk

XRP's price has been under pressure in recent days, with a 7% drop in just three trading sessions. This decline can be attributed to the broader crypto market rout, which saw Bitcoin fall to $67,000. XRP, being a high-beta altcoin, is particularly sensitive to changes in the overall market sentiment.

The technical breakdown of XRP's price is clear. The token has lost its key support level at $1.2740 and is now trading below all major moving averages. This suggests that the trend has shifted towards bearish continuation, with a potential target of sub-$1.

However, there are also bullish factors at play. Institutional ETF inflows have been attracting fresh capital to XRP's spot ETFs, despite the broader crypto ETF complex bleeding cash. Additionally, the CLARITY Act, a regulatory bill that has cleared its biggest Senate hurdle, could reprice XRP violently if it passes.

The positioning data is also noteworthy, with short bets on XRP outweighing long bets by roughly 9 to 1. This lopsided setup makes a short squeeze a possibility if the CLARITY Act passes, potentially propelling XRP's price towards $1.56 or even $2.20.

The chart is clear: XRP's immediate support lies at $1.21, followed by the psychologically critical $1 mark. A break below $1.20 would confirm the breakdown and open the path toward sub-$1. On the upside, reclaiming $1.2740 on a daily close with strong volume would negate the breakdown and flip the technical picture.