Ripple’s XRP has once again fallen below bearish territory. The debate over XRP’s security status and speculation surrounding the Securities and Exchange Commission’s (SEC) appeal on the recent case have created selling pressure that has pushed the altcoin just above a critical price level.
Ripple may face a rough time soon
U.S. District Judge Jed Rakoff’s recent decision in the Terraform Labs case could have significant implications for Ripple’s price for XRP. The judge’s refusal to differentiate cryptocurrencies based on their method of sale challenges the previous ruling in the Ripple case, which had a significant impact on XRP’s market behavior.
In the Ripple case, tokens sold directly to institutional investors were considered securities, while tokens sold to retail investors through secondary markets were not. This distinction led to a degree of market certainty, as it provided a framework for how XRP and similar tokens could be traded and regulated.
However, Judge Rakoff’s decision introduces a new level of uncertainty to the market. If all tokens, regardless of how they are sold, can be considered securities, this could lead to stricter regulation and potentially restrict the trading of tokens like XRP. This uncertainty could create selling pressure on XRP, which could lead to a fall in the price.
In addition, XRP experienced a significant increase in liquidation over the past two days as the price approached the significant $0.7 mark. Coinglass data shows that total liquidation for XRP exceeded $8 million due to price volatility around this critical level. With the price recently falling below $0.7, bullish traders liquidated nearly $5 million worth of positions. This action put downward pressure on the price, causing it to fall further.
What’s next for the XRP price?
Today, buyers pushed the XRP price to $0.72 in an attempt to trigger a bullish breakout, but soon bears emerged to open short positions and push the price below the 23.6% Fib channel. Despite the bulls’ successful defense of the support level, a robust recovery has yet to begin. At the time of writing, XRP price is trading at $0.69, down more than 1.45% in the past 24 hours.
Bulls are currently defending a drop below $0.67 as a breakdown will send the price into an extended bearish trend. The slowly falling 20-day EMA at $0.7 and the RSI below the signal line area suggest a slight upside for the bears. If the price falls and moves below the $0.67 level, it would indicate that any small increase is being sold. The price could then drop further from $0.65 and reach the $0.58 support. If this support fails, the price could drop further and consolidate at $0.55-$0.56.
If the buyers can break the $0.75 barrier, the XRP price could initiate a relief rally towards the $0.85 resistance.