Ripple vs. SEC: legal quagmires and crypto market turbulence
The legal tussle between Ripple and the Securities and Exchange Commission (SEC) has been a major influence on the cryptocurrency market, especially for Ripple’s native token, XRP. The SEC initiated a lawsuit alleging that Ripple conducted an unregistered securities offering by selling XRP. Ripple, on the other hand, insists that XRP is not a security but a digital asset.
Ladan Stewart, a former SEC litigator, recently expressed her views on the case, predicting that it is likely to end up in the Supreme Court. This forecast was made during a panel discussion with blockchain lawyers, including Rebecca Rettig of Polygon. Stewart’s remarks underscore the ongoing debate over what constitutes a security in the world of digital assets.
In July, Ripple achieved a partial victory against the SEC, but the company still faces potential fines of nearly $2 billion. The SEC is anticipated to appeal the 2023 ruling that deemed XRP’s secondary market sales on exchanges as “not investment contracts” or not securities transactions.
XRP price drops and may decline further
Amid this legal ambiguity, XRP’s price performance has been lacklustre. Over the past week, its price has dropped by around 20 percent, with the token unable to break through a key resistance level at $0.50. This price level is crucial for XRP holders as the altcoin maintained steady support at this price for nearly seven months.
Technical analysis suggests that XRP’s price could decline further, possibly sweeping liquidity at the weekly support at $0.4188, the 13 April low. Other support levels for XRP in the event of an extended correction include the March 2023 low of $0.3553 and monthly support at $0.2879.
The Balance of Power (BoP) technical indicator, which measures the relative strength of buyers and sellers, is currently negative 0.23, below the zero line. This indicates that sellers are dominant in the market. Traders looking to buy XRP are advised to wait for a trend reversal signal or a divergence between BoP and XRP price.
Meanwhile, Ripple continues to engage with the broader blockchain community. The company has extended the registration for Apex 2024, a global community summit for developers, businesses, and investors building on the XRP Ledger, until 30 April.
The outcome of the Ripple vs. SEC case could have significant implications for the cryptocurrency industry, potentially establishing a precedent for how digital assets are classified and regulated in the United States. As a result, market participants continue to closely monitor the case, contributing to the ongoing volatility in XRP’s price.
