- Summary:
- The SEC filed an appeal against an earlier ruling that was perceived to have gone against it. We look at the potential impact on XRP price.
XRP price declined sharply on Thursday folllowing news that the Securities and Exchange Commission (SEC) had filed an appeal against a previous ruling that fined Ripple $125 million. XRP inched up by 0.2 percent at the time of writing, trading at 0.522. The crypto asset has had a rough week during which it has lost 11 percent of its value as risk-off sentiment dominated the market ahead of the SEC decision.
Nonetheless, the SEC’s move does not come as a total surprise. The market regulator had shown its adamance that XRP was sold as a security during its inception days. Furthermore, the presentations made before US Congress also hinted at the possibility of an appeal despite a substantial rebuke of the SEC by some congressmen.
Judge Analisa Torress’ ruling in the earlier case was largely seen as having shaken the SEC’s key pillars in the case, and it will be interesting to see how the SEC will repackage its case in the appeal. The judge had ruled that XRP issuer, Ripple did not sell the tokens as securities to investors on exchanges, but institutional investors bought them as securities. This will be a key point of contention, as Ripple is widely expected to file a counter-appeal in the next two weeks.
Santiment data has shown a sharp spike in transaction volume involving XRP price in recent days, underlining the significance of the SEC appeal in influencing XRP price. The excitement around XRP is palpable.
Despite the long-running legal battle, it has been resilient and stayed among the top ten crypto assets by valuation. In the recent development Bitwise filled for an XRP Exchange Traded Product (ETP) on September 30, underlining the asset’s continued attractiveness even in the midst of a storm.
However, the approval could take some time following the appeal. Nonetheless, this also signals a potential accumulation of XRP in the coming days and potential explosion if the case goes the Ripple’s way. On the other hand, as XRP had been resilient since the case started in December, 2020 I expect it to potentially make some gains during the appeals hearing period.
XRP approaches key support
XRP has reached the neckline of its double-top pattern near the $0.517 level, which has served as the support level for the token since August. However, a second support at the psychological mark of $0.500 is more significant, and a break below that level could strengthen the bearish momentum.
XRPUSD on a daily chart with two key support levels
XRP price prediction
XRP price has recently built upward momentum that will likely favour the upside if the price action stays above 0.520. In that case, the XRPUSD pair could move upward to the first resistance at 0.529. However, a stronger momentum could break above that level to test 0.537.
On the other hand, moving below 0.520 will favour the sellers, with the first support likely to be at 0.514. Extended bearish control could enable a break below that level and render the upward narrative invalid. Also, the decline could extend to test 0.507.
