- Ripple to be sued by the SEC as XRP's security status goes under scrutiny
- XRP price prepares for a significant downturn while technicals turn bearish
- On its way down, the token may find support around $0.36
Fresh reports suggest that the U.S. Securities and Exchange Commission (SEC) is looking to slap a massive lawsuit on Ripple. The contention stems from the disputed status of the company's native cryptocurrency, XRP. The move comes shortly after the federal agency's chairman Jay Clayton announced he will be stepping down by the end of the year.
Ripple's CEO and one of its co-founders in soup
In an interview, the head of Ripple Brad Garlinghouse said that he and the distributed ledger startup's co-founder, Chris Larsen, are reportedly going to be named as defendants in a lawsuit against the SEC. Garlinghouse didn't mince words in lashing back at the U.S. financial watchdog's decision to drag his company to court.
"It's not just Grinch-worthy; it's shocking. It's an attack on the entire crypto industry and American innovation," said Garlinghouse.
He also added that Ripple will fight the case and that the U.S agency is 'cherry-picking' innovation in the cryptocurrency sphere to suit their regulation needs. Especially in a scenario when the inadvertent beneficiary could be China.
The SEC - out of step with other G20 countries & the rest of the US govt - should not be able to cherry-pick what innovation looks like (especially when their decision directly benefits China). Make no mistake, we are ready to fight and win - this battle is just beginning. (3/3)— Brad Garlinghouse (@bgarlinghouse) December 22, 2020
Nonetheless, the SEC will be going ahead with its charge of claiming that XRP is a security and that Ripple failed to register it before soliciting the sale of this token.
XRP price tumbles while technicals turn bearish
XRP price has taken a 17% nosedive in the last 24 hours, breaking below the $0.52 support level.
Now, a further spike in selling pressure could see the token move past the $0.44 price hurdle and drop towards the next critical area of interest at $0.36 based on the Fibonacci retracement indicator.
XRP/USD 12-hour chart
The parabolic stop and reverse, or “SAR,” adds credence to the pessimistic outlook as it anticipates that XRP’s uptrend reached exhaustion.
By taking into consideration the last two times the parabolic SAR flipped from bullish to bearish within the 12-hour chart, XRP price may drop another 18% if the sell-off intensifies. This target coincides with the 61.8% Fibonacci retracement level at $0.36.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.