Ripple update: What to expect from XRP and Ripple lawsuit this week
- Ripple active addresses doubled over the weekend, signaling a rise in activity among traders, per Santiment data.
- XRP traders have consistently taken profits in the altcoin in the last two weeks, increasing selling pressure on the altcoin.
- XRP sustained above key psychological support at $0.60, extending gains by nearly 2% on Sunday.
- Ripple proponents expect a ruling in the SEC lawsuit by the end of July, per the comments of attorney Fred Rispoli.
Ripple (XRP) extended gains by nearly 2% early on Sunday. XRP sustained above the psychological price level of $0.60 amidst the optimism of Donald Trump’s speech at the Bitcoin conference, and BTC’s recent gains.
Ripple lawsuit update
Securities & Exchange Commission’s (SEC) lawsuit against Ripple awaits a final ruling by Judge Analisa Torres. At the Bitcoin conference, Donald Trump said SEC Chair Gary Gensler will be fired “on day one” if he is elected President of the United States.
Crypto proponent Trump promised the attendees a new SEC Chair and an end of the anti-crypto stance of the Biden-Harris government. Trump’s win in the November elections could therefore influence the Ripple lawsuit.
Ripple executive Brad Garlinghouse has slammed the SEC and Chair Gensler for their “regulation by enforcement” approach and a “lack of clarity on crypto regulation” in interviews, on several occasions.
The lawsuit ruling is expected by the end of July 2024, per attorney Fred Rispoli’s prediction.
SEC vs. Ripple lawsuit ruling could come out as early as July 13, according to this pro-crypto attorney
On-chain metrics show mixed signs
Ripple traders have consistently taken profits on their XRP holdings in the past two weeks. Since July 12, the Network Realized Profit/Loss metric that calculates the net profit/loss of all coins moved on a given day shows positive spikes. This implies XRP traders are taking gains and contributing to selling pressure on the altcoin.
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XRP Network Realized Profit/Loss vs. price
Address activity doubled since Friday. Over the weekend the count of active addresses was twice that of Friday, as seen in the Santiment chart below. Rising activity signals relevance and demand for XRP among traders.
 [17.40.55, 28 Jul, 2024]-638577681528053741.png)
XRP active addresses vs. price
Where is XRP price headed?
Ripple is likely to collect liquidity in the Fair Value Gap (FVG) between $0.5945 and $0.5783, as seen in the XRP/USDT daily chart below. Once the FVG is filled, XRP could bounce off of support at $0.5632. This level coincides with the 50% Fibonacci retracement of the decline from the March 11 top of $0.7440 to the July 5 low of $0.3823.
XRP could target the 78.6% Fibonacci retracement level of $0.6666, nearly 11% gain from the current level.
The momentum indicator Moving Average Convergence Divergence (MACD) flashes green histogram bars, signaling underlying positive momentum in Ripple’s price trend. While the momentum is likely fading, there is likelihood of a recovery in XRP once the altcoin collects liquidity.
XRP/USDT daily chart
A daily candlestick close under support at $0.5632 could signal a bearish thesis for XRP. XRP could find support at the July 19 low of $0.5404.
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.
