XRP is being tested again for direction between key support and resistance after a recent rebound.

On Sept. 1 (local time), blockchain outlet The Crypto Basic reported that XRP neared $1.70 two weeks ago, met resistance in that range and then corrected. It is now trading around $1.34.

Technical indicators have not yet tilted in one direction. Moving averages point to a buy signal, but the 14-day relative strength index (RSI) has fallen to around 43 and remains in neutral territory, neither overbought nor oversold. Volatility could increase again if either buyers or sellers take the lead.

Derivatives markets are also cited as a factor that can amplify near-term volatility. Over the past 12 hours, long liquidations totalled $1.7 million, about 77 percent of total liquidations of $2.21 million. On a 24-hour basis, long liquidations were tallied at $2.13 million, or about 64 percent of the total. Such liquidation flows could further increase XRP volatility as trading concentrates around key price levels.

Funds flows, however, are supportive. Cumulative inflows into spot XRP exchange-traded funds (ETFs) recently reached about $1.66 billion.

The regulatory calendar is also a key variable that could determine the next direction. The U.S. Clarity Act includes provisions confirming XRP, along with other assets, as a digital commodity overseen by the U.S. Commodity Futures Trading Commission (CFTC). If passed, the bill could reduce regulatory uncertainty that remained after court rulings and strengthen XRP's regulatory standing.

Markets are also watching the Senate's Sept. 15 cloture vote. Prediction market Polymarket reflects a 15 percent chance that the bill will advance within this year. If the vote succeeds, institutional demand could strengthen and supply pressure could intensify, leaving room for XRP to break through nearby resistance.

The price path is also tied to this timetable. If buying breaks above $1.51, XRP could attempt $1.60 and then $2.00 by late September. This scenario depends on first clearing the $1.45 to $1.51 resistance zone and then creating a clear breakout move above $1.51.

If the vote fails or is delayed until after the midterm election phase, market confidence could weaken. Without additional legislative support, XRP would have to continue relying on existing judicial precedents, and selling pressure could again head toward the $1.00 support level.

The key is that price charts, derivatives, institutional funds and regulatory issues are all affecting XRP's direction at the same time. With a possible technical breakout and legislative procedures intertwined, not only short-term price moves but also the possibility of broader access within the financial system is being put to the test.