XRP price drops below psychologically important level while Ripple CLO weighs evidence presented by SEC
- XRP price plummeted below the psychologically important $0.60 level on Tuesday.
- Ripple CLO Stuart Alderoty weighed the SEC evidence considered by Judge Analisa Torres prior to the July 13 ruling.
- Alderoty defends XRP token’s non-security status and backs his claims with documents from Coinbase lawsuit.
Ripple (XRP) price slipped below the key psychological level of $0.60 on Tuesday for the first time in nearly 10 days. The altcoin posted a second consecutive day of losses as market participants and key players still debate Coinbase’s legal loss against the US Securities and Exchange Commission (SEC).
The SEC’s legal battles with Coinbase and Ripple are intertwined. Coinbase’s defense relies on Judge Torres’ ruling about XRP, which considered that the token wasn’t a security when it was sold through exchanges. This ruling, considered at the time as a partial victory for Ripple, appears to be in question as the judge in the SEC vs. Coinbase case decided to deny the exchange’s motion to dismiss the lawsuit. As it hapenned with Ripple, the SEC considers that Coinbase operated as an unregistered intermediary of securities.
XRP’s status as a security or non-security influences the SEC’s allegations against Coinbase and ties the two lawsuits together.
Daily digest market movers: Ripple CLO breaks down SEC’s evidence, application of Howey
- The SEC’s lawsuit against Coinbase has an impact on the regulator's lawsuit against Ripple and weighs heavily on the outcome since the cases rely on XRP’s security status.
- The SEC alleges that Coinbase engaged in the unregistered sale of US securities through its staking program, from which investors earned interest on their crypto tokens. At the end of March, the judge rejected the exchange’s motion to dismiss the lawsuit.
- Ripple’s Chief Legal Officer (CLO) Stuart Alderoty examined the SEC’s filing in the Coinbase lawsuit and said on its X account that the regulator has offered four different “confusing” definitions of what constitutes a crypto ecosystem.
Once Judge Torres in the Ripple case (Ivy League educated, with Bronx street sense) looked at the full evidentiary record, she understood the SEC had strayed far from “Howey” where a promoter made promises directly to investors about a clearly defined enterprise. pic.twitter.com/D9Bsyt9Uv8
— Stuart Alderoty (@s_alderoty) April 1, 2024
- Alderoty said that in its lawsuit against Ripple, the SEC strayed from “Howey,” a test that determines what qualifies as an investment contract subject to US securities laws.
- XRP’s “security” status is at risk since Judge Analisa Torres’ application of Howey in the July 13 ruling is being questioned and has been dismissed by two US federal judges so far. Find out more about this here.
Technical analysis: XRP price slips below $0.60, no relief in sight
Ripple is trading sideways within a tight range between $0.5670 and $0.6686, two levels that act as key support and resistance for XRP on the daily chart, respectively. The latest decline seems to have some momentum as both the red bars below the neutral line on the Awesome Oscillator (AO) and the Relative Strength Index (RSI) move below the 50 midline, support the bearish thesis.
XRP price could sweep support at $0.5386, a significant support level on the daily chart and collect liquidity before attempting a recovery to test resistance at $0.6686. A daily candlestick close below the $0.60 level could also trigger a run down to the January 31 low of $0.4853.
XRP/USDT 1-day chart
If XRP price closes above $0.6147, the 50% Fibonacci placeholder of its rally from January 31 low of $0.4853 to March 11 peak of $0.7440, it could invalidate the bearish thesis for Ripple. XRP price faces resistance at $0.6686, in its climb to the year-to-date peak of $0.7440.
Cryptocurrency prices FAQs
Token launches like Arbitrum’s ARB airdrop and Optimism OP influence demand and adoption among market participants. Listings on crypto exchanges deepen the liquidity for an asset and add new participants to an asset’s network. This is typically bullish for a digital asset.
A hack is an event in which an attacker captures a large volume of the asset from a DeFi bridge or hot wallet of an exchange or any other crypto platform via exploits, bugs or other methods. The exploiter then transfers these tokens out of the exchange platforms to ultimately sell or swap the assets for other cryptocurrencies or stablecoins. Such events often involve an en masse panic triggering a sell-off in the affected assets.
Macroeconomic events like the US Federal Reserve’s decision on interest rates influence risk assets like Bitcoin, mainly through the direct impact they have on the US Dollar. An increase in interest rate typically negatively influences Bitcoin and altcoin prices, and vice versa. If the US Dollar index declines, risk assets and associated leverage for trading gets cheaper, in turn driving crypto prices higher.
Halvings are typically considered bullish events as they slash the block reward in half for miners, constricting the supply of the asset. At consistent demand if the supply reduces, the asset’s price climbs. This has been observed in Bitcoin and Litecoin.
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.
