XRP Price Evolution 2026: What Is the Market Trading Before the CLARITY Act Signing?

On March 17, 2026, XRP price rebounded above $1.50. This level itself isn’t particularly special; what’s notable is the timing—just two weeks before the market expects the signing of the CLARITY Act (Digital Asset Market Clarity Act). Two weeks prior, on-chain data showed whale addresses sold over 200 million XRP. The price recovery coincided with large holders reducing their holdings, creating a divergence that raises a question: what is the market actually pricing in? Is it the regulatory benefits expected after legislation passes, or the liquidity exit following positive developments?

Why are whales reducing holdings at low prices?

On-chain data reveal an counterintuitive phenomenon: during XRP’s decline from a high of $2.40 to around $1.40, addresses holding between 1 million and 10 million XRP significantly reduced their holdings. The sale of over 200 million tokens in two weeks cannot be explained by retail investors alone.

There are three possible reasons for this reduction. First, some early holders see the CLARITY Act as a temporary liquidity window and choose to lock in gains before the positive news is realized. Second, institutional investors are waiting for a clearer regulatory framework and are temporarily withdrawing from risk positions. Third—and perhaps most importantly—large traders may be preparing for volatility post-legislation by hedging: reducing spot holdings while establishing offsetting positions in derivatives.

It’s worth noting that not all whales are exiting. Over a longer cycle, since the market correction began in October 2025, super-large addresses holding between 10 million and 100 million XRP have accumulated over 4 billion tokens. This “big whale accumulation, mid-tier whale reduction” pattern indicates differing expectations among participants with different fund sizes regarding the legislative outcome.

Why is the CLARITY Act becoming the core of pricing?

XRP’s uniqueness lies in its partially clarified legal status following the 2025 SEC lawsuit, where the court ruled that XRP trading in secondary markets does not constitute a security. However, judicial rulings and legislative confirmation are fundamentally different: rulings address past issues, while legislation sets future rules.

The core value of the CLARITY Act is that it aims to answer: where does digital assets stand within the US financial system? If passed, XRP’s non-security status will be codified into law, allowing regulated institutions like banks and pension funds to hold and use XRP under clear rules. Ripple CEO estimates an 80% chance of the bill passing before April, based on the White House’s March 1 negotiation deadline and the bipartisan support in the House (294-134 votes).

However, the legislative process faces resistance. Banks oppose provisions allowing stablecoin issuers to offer yield products, fearing deposit outflows. This dispute essentially reflects a competition between traditional finance and crypto finance on asset-liability management. If no compromise is reached, legislation could be delayed until after midterm elections or even shelved.

How do three regulatory scenarios impact price dynamics?

Based on the legislative process, three scenarios can be envisioned, each corresponding to different price ranges.

Scenario 1: Bill passes smoothly in April (about 40% probability). This is the most priced-in scenario. Legislation would activate two types of capital: first, institutional compliant funds that have been unable to enter due to regulatory uncertainty; second, ETF funds waiting to confirm XRP’s legal status. As of January 2026, XRP ETF assets exceeded $1.3 billion. If the bill passes, this could grow to over $5 billion within six months, representing about 4% of circulating supply at current prices. Under this scenario, XRP could break above $2, testing the $2.5–$3 range.

Scenario 2: Legislation delayed until later in the year (about 45%). This is the most contested scenario. Opposition from banks causes negotiations to stall, requiring re-negotiation or waiting for a new Congress after midterms. In this case, XRP price would revert to supply-demand fundamentals. Currently, exchange-held XRP is at a seven-year low of about 1.6 billion tokens. Supply contraction provides some support, but without legislative catalysts, upside is limited. Price would likely range between $1.20 and $1.80, with lower volatility.

Scenario 3: Bill is substantially shelved (about 15%). This implies the current legislative cycle fails, and the regulatory framework must be rebuilt. XRP would revert to its judicially established legal status—legal to trade in secondary markets but lacking systemic rules. The regulatory premium priced in would quickly dissipate, and the price could test the $1 support level. However, even in this case, XRP is no longer a “problem asset” as per SEC lawsuit, and its payment network remains operational, making a drop below $0.80 less likely.

Why is the stablecoin clause a focal point in the debate?

The controversy over the CLARITY Act isn’t about XRP itself but centers on the regulation of stablecoins. Banks oppose allowing non-bank issuers to create stablecoins and offer yields, fearing disruption of deposit bases. This dispute is fundamentally about control over the payment infrastructure.

For XRP, the significance of the stablecoin clause lies in its impact on the compliance pathway for Ripple’s RLUSD stablecoin. If stablecoin issuers are permitted to offer yield products, Ripple’s payment network could integrate more attractive capital products, boosting XRP Ledger’s capital efficiency. If yields are strictly limited, cross-border payments would rely more on traditional fiat channels, resulting in a slower growth trajectory.

Structural changes are underway

Regardless of the final outcome of the CLARITY Act, two structural shifts have already occurred.

First, the institutional infrastructure is developing. The existence of XRP ETFs means traditional funds can allocate to XRP via compliant channels without directly holding tokens. Since January 2026, despite the price correction from $2.40, ETF inflows have continued. This indicates some institutional capital views price dips as buying opportunities rather than exit signals.

Second, the expansion of global payment networks. Ripple’s on-demand liquidity network now covers major Asian remittance corridors—Japan, Philippines, Vietnam, Indonesia—and 27 African countries. These real-world use cases do not depend on US legislation, providing fundamental demand support. Even in the most pessimistic scenario, this network remains operational, and XRP retains value capture potential.

Potential risks and cognitive biases

Market pricing of the CLARITY Act involves some biases:

1. Overestimating probabilities: Market forecasts suggest about a 78% chance of passing within the year, but this reflects long-term expectations, not the immediate April window. If April passes without legislation, markets may revise expectations downward.

2. Overestimating legislative impact: Passing the bill doesn’t mean XRP price will immediately surge. Institutional onboarding takes time—compliance, custody arrangements, risk management protocols all require gradual development. After Bitcoin ETF approval in 2019, prices did not spike immediately but experienced months of consolidation before trending upward.

3. Ignoring macro factors: Standard Chartered recently lowered XRP’s target from $8 to $2.80, citing ETF outflows, Fed tightening, and risk sentiment cooling. Even with regulatory clarity, macro liquidity remains a key driver of price.

Key points to watch over the next six months

In the coming six months, market participants should monitor three dimensions:

• Legislative: Outcomes of White House negotiations with banks before the end of March. If banks agree to limited compromises, legislation may proceed as scheduled. If opposition persists, delays until 2027 are possible.

• Capital flows: ETF inflows before and after the legislative window. If ETF net inflows exceed $500 million within two weeks of passage, it indicates institutional anticipation of regulatory clarity. Steady inflows suggest the market has already priced in the regulatory outlook.

• On-chain activity: Whale addresses near $1.50. If legislation passes and price breaks above $2, observing whether whales who sold earlier start accumulating again will reflect long-term valuation confidence.

Summary

The XRP rebound to $1.47 is fundamentally a market game around the legislative process of the CLARITY Act. Current prices incorporate expectations of passage and concerns over banking opposition. The negotiations in the next two weeks will determine the outcome of this game. Regardless of the result, XRP has undergone a structural shift from judicial clarification to infrastructure development, with its price dynamics shifting from “uncertain legal status” to “institutional allocation under a regulatory framework.” For participants, the key is to distinguish between short-term sentiment factors and those reshaping long-term valuation fundamentals.

FAQ

1. If the CLARITY Act passes, will XRP be recognized as a legal payment instrument?
   The bill doesn’t grant XRP legal tender status but confirms its non-security attribute at the federal level, clarifying that exchanges, custodians, and financial institutions can provide XRP-related services within a compliant framework. This makes institutional entry clearer, but XRP’s payment function still depends on market acceptance and network coverage.

2. Does whale selling indicate large holders are bearish?
   Not necessarily. The sale of 200 million tokens over two weeks coexists with continued accumulation by large addresses. This divergence may reflect differing expectations among participants of various sizes regarding legislative prospects or active rebalancing between spot and derivatives.

3. Is XRP’s price directly linked to Ripple’s business?
   There is a relationship but not causality. Ripple’s on-demand liquidity uses XRP as a bridge asset; increased network activity can support demand. However, XRP’s price is primarily driven by secondary market supply and demand, regulatory expectations, and overall liquidity conditions, not solely Ripple’s revenue.

4. If the bill fails, will XRP fall below $1?
   The probability is low. The judicial ruling in 2025 already established XRP’s non-security status, which won’t change if legislation stalls. ETF inflows and network expansion also provide support. If legislation fails, a test of $1 is possible, but a drop below $0.80 would require additional negative factors.

5. How should we understand XRP’s RWA narrative?
   Tokenization of real-world assets is an extension of the XRP Ledger ecosystem but not its core narrative. XRP’s primary role remains as a bridging asset in cross-border payments. RWA impacts are more relevant to other tokens and applications within XRPL, not XRP’s immediate valuation.