Ripple extends losses on Friday, XRP plunges alongside altcoins in crypto market bloodbath
- Bitcoin price drop under support at $55,000 ushered a market-wide correction in top altcoins, including XRP.
- Ripple erased all gains from the past fifteen months and hit $0.40 early on Friday.
- XRP extended losses by 7%, down to $0.38 on Friday.
Ripple (XRP) piled losses alongside top altcoins and Bitcoin early on Friday. The German government’s Bitcoin transfers and Mt.Gox payback to creditors have created uncertainty among traders and increased the pressure on Bitcoin and altcoins like XRP.
The latest developments in the Securities and Exchange Commission (SEC) vs. Ripple lawsuit are skewed in favor of the payment remittance firm, with Judge Amy Berman Jackson treating Judge Torres’ 2023 ruling as precedent in the SEC vs. Binance suit.
Daily Digest Market Movers: Ripple hit by steep correction amidst crypto bloodbath
- Ripple erased its gains from the past fifteen months, falling to a fresh 2024 low of $0.38, early on Friday.
- XRP trades at $0.39, at the time of writing, wiping out nearly 7% of its value on Friday.
- The developments in the SEC vs. Ripple lawsuit support Judge Torres’ ruling that XRP is not a security in secondary market sales.
- Judge Torres’ 2023 ruling, which offered a partial victory to Ripple in the longstanding legal battle with the regulator, was strengthened by Judge Amy Berman Jackson using it as precedent in the SEC lawsuit against Binance.
- Ripple traders have been shedding their holdings at a loss since April 2024, per Santiment data.
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XRP NPL and Supply on exchanges
Technical analysis: XRP dips to lowest level in fifteen months
Ripple is in a downward trend since March 11. The altcoin dipped to its lowest level in fifteen months, at $0.38, early on Friday. The altcoin erased gains from earlier in 2024 amidst a marketwide correction in cryptocurrencies.
Ripple could find support at the March 21, 2023, low of $0.37 if it extends losses further. XRP is down 7% on Friday.
XRP/USDT daily chart
On the contrary, a daily candlestick close above $0.4611 could invalidate the bearish thesis and push XRP higher toward the next psychologically important resistance at $0.50.
SEC vs Ripple lawsuit FAQs
It depends on the transaction, according to a court ruling released on July 14: For institutional investors or over-the-counter sales, XRP is a security. For retail investors who bought the token via programmatic sales on exchanges, on-demand liquidity services and other platforms, XRP is not a security.
The United States Securities & Exchange Commission (SEC) accused Ripple and its executives of raising more than $1.3 billion through an unregistered asset offering of the XRP token. While the judge ruled that programmatic sales aren’t considered securities, sales of XRP tokens to institutional investors are indeed investment contracts. In this last case, Ripple did breach the US securities law and will need to keep litigating over the around $729 million it received under written contracts.
The ruling offers a partial win for both Ripple and the SEC, depending on what one looks at. Ripple gets a big win over the fact that programmatic sales aren’t considered securities, and this could bode well for the broader crypto sector as most of the assets eyed by the SEC’s crackdown are handled by decentralized entities that sold their tokens mostly to retail investors via exchange platforms, experts say. Still, the ruling doesn’t help much to answer the key question of what makes a digital asset a security, so it isn’t clear yet if this lawsuit will set precedent for other open cases that affect dozens of digital assets. Topics such as which is the right degree of decentralization to avoid the “security” label or where to draw the line between institutional and programmatic sales are likely to persist.
The SEC has stepped up its enforcement actions toward the blockchain and digital assets industry, filing charges against platforms such as Coinbase or Binance for allegedly violating the US Securities law. The SEC claims that the majority of crypto assets are securities and thus subject to strict regulation. While defendants can use parts of Ripple’s ruling in their favor, the SEC can also find reasons in it to keep its current strategy of regulation by enforcement.
The court decision is a partial summary judgment. The ruling can be appealed once a final judgment is issued or if the judge allows it before then. The case is in a pretrial phase, in which both Ripple and the SEC still have the chance to settle.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
