Ripple’s XRP is once again in the spotlight, but this time for its absence from Hong Kong’s list of approved cryptocurrencies. The Securities and Futures Commission (SFC) released a selection of digital assets permitted for trading, including Bitcoin, Ethereum, Avalanche, and Chainlink—but XRP was notably left out. This decision triggered a sharp 12% decline in XRP’s price, raising concerns among investors.

Why Was XRP Excluded?

Hong Kong has taken a cautious approach to crypto regulation, ensuring that only assets meeting strict compliance standards are approved. The SFC recently granted trading licenses to PantherTrade and YAX, limiting their offerings to a handful of major cryptocurrencies. XRP’s omission may stem from Ripple’s ongoing legal battle with the U.S. Securities and Exchange Commission (SEC), which continues to cast uncertainty over its classification as a security or a currency.

Given the unresolved legal status, Hong Kong’s regulators may have opted to exclude XRP to avoid potential international complications. Additionally, Hong Kong’s strict anti-money laundering (AML) and counter-terrorism financing (CTF) measures demand a higher level of compliance, which could be a factor in XRP’s exclusion.

Market Reaction and Price Outlook

XRP’s price took an immediate hit, dropping by 12% to approximately $2.45. The decline also impacted XRP’s open interest, which fell to $3.52 billion—its lowest level in a month and a stark drop from its $7.62 billion peak in January.

From a technical perspective, XRP is trading below key moving averages, including the 10-day EMA at $2.48 and the 21-day EMA at $2.54. This suggests continued downside risk in the short term. However, if XRP manages to reclaim these levels, it could signal a potential recovery.

Should Investors Be Concerned?

While XRP’s exclusion from Hong Kong’s approval list is a setback, it does not necessarily indicate a long-term negative outlook. The token continues to see strong global adoption, and any resolution to Ripple’s legal case could reignite investor confidence.

For traders, the price drop may present a short-term buying opportunity, particularly if XRP finds support near current levels. However, regulatory uncertainty remains a significant risk factor.

Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Always conduct your own research before making any trading decisions.