XRP price primed to surge despite Ripple's legal uncertainty

Ripple is up 5% on the day following a rebound from the recent support at $0.26. Altcoins were caught up in Bitcoin's downswing to $30,000 as covered on Monday. XRP seems to be embracing a recovery mission that could massively send it to higher price levels, perhaps $0.6.

XRP is getting ready for a rally despite Ripple's legal woes

The Securities and Exchange Commission (SEC), on December 22, filed a case against Ripple Labs Inc., which extended to its two top executives, Ripple Labs CEO Bradley Garlinghouse and founder Christian Larsen, for allegedly raising more than $1.3 billion by selling unregistered security tokens. The lawsuit saw XRP bleed profusely to the extent of revisiting lows under $0.2 before embracing support at $0.17.

The SEC's complaint was filed in the federal district court of Manhattan and charged Ripple and its two top executives for violating the provisions of the Securities Act of 1993. The case has not yet been determined, which leaves Ripple and the fate of XRP in limbo.

XRP's bullish scenario has been reinforced by various on-chain metrics, including Santiment's network growth. Since December 28, the number of new addresses joining the XRP platform has grown significantly, topping out at 7,526 on January 8. While a minor retreat was recorded in the last few days, recovery is ongoing, and new addresses currently stand at 6,900.

An increase in an asset's network growth is usually a bullish signal, hence the possibility of XRP surging to higher levels. The protocol also receives attention from the mainstream, which helps with faster adoption.

XRP network growth

XRP whales are also on a buying spree according to the holder distribution metric by Santiment. The wallets holding between 10,000-to-1 million and 1-to-10 million XRP have soared significantly since December 28. In other words, whales are taking advantage of the low prices to fill their bags in anticipation of a massive recovery.

XRP holder distribution chart

Similarly, the MVRV shows the average profit or loss of all XRP holders based on the price when every token last moved, confirms that XRP is sitting on a buy zone that has historically led to massive gains. In other words, XRP is oversold and trading below its market value; thus, the potential for recovery is enormous.

XRP MVRV chart

From a technical perspective, XRP is trading between crucial support and resistance, where the 50 Simple Moving Average is the immediate anchor while the 200 SMA caps movement on the upside. Consolidation is likely to take precedence in the near term based on the levelling Relative Strength Index at the midline.

XRP/USD 4-hour chart

The bullish outlook will be thrown out the window if XRP fails to defend the 50 SMA support. On the downside, the 100 SMA at $0.25 will be tested and perhaps give way for losses eyeing $0.2.