Ripple [XRP] climbed to a local high of $0.744 on March 11. Since then, the market-wide sell-off caused the altcoin’s prices to plummet.
The ongoing SEC vs. Ripple case has some important data Shortly. This could impact investor sentiment.
Another sign that bullish sentiment was cooling was that whales moved their XRP holdings to centralized exchanges.
The court rulings in the SEC-Ripple battle, in addition to broader market forces, would likely play a crucial role in XRP’s price action in the coming weeks.
Ripple labs 101
XRP is a cryptocurrency that Ripple Labs uses to conduct transactions on its network.
Although Ripple is a centralized fintech company that started in 2004 as RipplePay, it was later co-founded in 2012 by Chris Larsen and Jed McCaleb with the vision of creating a faster and more secure way to transact around the world .
Although the two are used interchangeably, Ripple is a technology company while XRP is the open-source digital asset.
The crypto operates on its blockchain known as the XRP ledger (XRPL), where transactions are facilitated by RTXP or the Ripple transaction protocol.
It, unlike many other cryptocurrencies, is pre-mined with a maximum token supply of 100 billion. The main purpose of the crypto is to serve as a settlement layer that aids in transactions with the Ripple network.
However, it is traded as a cryptocurrency available on several exchanges including options, swap exchanges, spot exchanges, futures, custodian and non-custodian exchanges.
XRP vs SEC: The Clash
The US SEC filed a lawsuit against Ripple Labs in 2020 for selling XRP as an “unlicensed security,” claiming that its distribution of $1.3 billion worth of crypto to its stakeholders violated the law.
The main point of contention here was whether XRP was a security and therefore whether it was a stock in Ripple or whether it was a cryptocurrency like Bitcoin.
Ripple has been at odds with the SEC for a few years now.
The SEC claimed that Ripple’s sales of WJ Howey Co. to reinforce his position.
In doing so, the agency stated that whether an investor has control over profits is a determining factor as to whether an investment contract is a security or not.
Ripple Labs, on the other hand, argued that the SEC did not notify or warn the organization.
After three years of deliberation, the case was finally ready ruled in July 2023. The court ruled that XRP was NOT a security in itself.
The request for summary judgment was also denied by the SEC. It later had to drop its securities infringement charges against Ripple and XRP.
The SEC was given authority over cryptocurrency sales to institutions, while crypto transactions on exchanges would not be treated as securities transactions.
Technical analysis of the one-day chart
Source: XRP/USDT on TradingView
In the one-day time frame, the swinglow was at the $0.525 level. This was also a demand zone that tested the token several times in the past month.
At the time of writing, momentum on the daily chart was starting to shift bearishly.
So, it was possible that there would be a move towards the $0.52-$0.54 demand zone in the coming days. The OBV was unable to reverse the resistance level to support.
This showed that buyers did not yet have a clear superiority over sellers in terms of numbers.
Combined with the momentum and losses of the past week, a more southerly move seemed likely.
A look at the charts on lower time frames, such as 4-hour or lower, indicated that $0.65 was a key short-term resistance area.
The magnetic zones were stronger in the south
Source: Hyblok
The price is attracted by the liquidity. Therefore, a large number of buy and sell orders or liquidation levels would attract prices like a magnet. At the time of writing, the $0.56 level has a relatively high number of liquidation levels.
Meanwhile, the $0.65 and $0.75 levels could see a response from XRP. Still, the chances of a rebound remained low.
AMBCrypto thinks a move towards $0.56 is likely. The $0.51 level, the next major liquidity position, was also possible.
Meanwhile, a recovery to the $0.65 level or higher was considered less likely, based on the liquidation heatmap.
Conclusion
XRP has remained range-bound since August 2023. The inability to break the $0.7 resistance and stay there even as Bitcoin is at an all-time high did not underline the bullish strength. Investors and swing traders could wait for further losses before buying XRP, trying to take profits near the highs in the range.
Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.