XRP Price Prediction: $1.40 Breakout Could Open Path to $2.10

XRP (XRP) has gone up by more than 4% in the past 24 hours, following news that the blockchain is voting on a key upgrade that would allow decentralized apps to offer institutional credit backed by its native asset.

The XRP Ledger's XLS-65 and XLS-66 proposals are being voted on as we speak and have reached a quorum exceeding 30%.

These proposals would pave the way for institutional credit to occur within this blockchain by using XRP as collateral for the loans and Ripple USD (RLUSD) as the settlement asset.

This could free up billions of dollars in available liquidity for XRP holders. Evernorth, a digital asset treasury (DAT) that has focused entirely on XRP, has stated its intention to use this feature if the proposal is passed.

The company is sitting on over $600 million worth of XRP that it cannot use as collateral without having to leave the XRP Ledger. Hence, this proposal could unlock billions in untapped liquidity that can be used to further monetize these holdings.

RLUSD Market Cap Explodes as Adoption Accelerates

A DeFi protocol called Clearpool that has facilitated over $900 million in on-chain loans for institutions recently proposed a full-blown migration to the XRP Ledger to unlock the potential of this network's institutional credit segment.

At the same time, the market cap of Ripple USD (RLUSD), the network's native stablecoin, surged to a new all-time high of $2.4 billion, as adoption seems to be accelerating.

As a result, Ripple USD has now flipped Ondo Finance's USDY for the 10th spot in the stablecoin market, and could soon surpass PayPal USD (PYUSD) and BlackRock's BUILD (BUIDL) if the trend continues.

Meanwhile, this week will be key to the crypto market, as the Clarity Act will be subject to procedural voting within the U.S. Senate. If passed, the bill will be sent to the floor for voting.

In addition, the Federal Reserve will decide on interest rates on Wednesday. Data from FedWatch indicates that nearly 90% of analysts expect a 25bps rate hike this month, but comments from the head of the Fed, Kevin Warsh, could still move the market's needle.

XRP Could Rally to $2.10 as Long as This Key Support Holds

Heading to the daily chart, XRP has tagged the upper bound of a bull flag pattern that has emerged after its latest rally.

This is a consolidation setup that typically indicates that the market is taking a breather before the previous trend resumes. In this case, we need the price to break past $1.40 for the rally to resume.

Volumes are picking up today, rising by 120%, as these two key proposals continue to be voted on. If they are passed, we may see XRP exploding and resuming its rally toward the $1.80 level — our near-term target.