• XRP traders registered $25.67 million in losses on since Tuesday. 
  • XRP price slumped to a two-week low of $0.56 on Wednesday. 
  • Ripple is expected to file its response to the SEC’s remedies-related brief by April 22. 

Ripple (XRP) price declined to $0.56 on Wednesday, the lowest level in two weeks, as traders awaited further developments in the Securities and Exchange Commission’s (SEC) lawsuit against Ripple. The next key deadline in the legal battle is April 22, when Ripple is expected to file its response to the SEC’s remedies-related brief. 

Meanwhile, the recent decline in XRP’s price has caused traders to realize more than $25 million in losses in the past two days. 

Daily digest market movers: XRP traders shed holdings at losses ahead of looming lawsuit deadline

  • Ripple holders realized $25.67 million in losses on their XRP holdings since Tuesday, as seen on the Network Realized Profit/ Loss chart on Santiment. 
  • The metric measures the overall profit or loss realized by traders who sold their assets on a particular day. If traders realize losses alongside a drop in price, it is considered a sign of capitulation. 

XRP

Network Realized Profit/ Loss.

  • Ripple traders are shedding their XRP holdings likely due to the price decline in the asset and the uncertainty surrounding the altcoin’s security status. 
  • Ripple’s Chief Legal Officer Stuart Alderoty commented on the SEC’s stance on XRP’s security status and the regulator’s different definitions of what constitutes a crypto ecosystem, in his recent tweet. 
  • Alderoty addresses the community’s concern over XRP’s status as a “non-security” and fear that SEC could get Judge Analisa Torres’ XRP ruling thrown out.
  • XRP holders pay attention to the next key deadline in the Ripple lawsuit, April 22, when Ripple is expected to file its opposition to the SEC’s remedies-related brief. 

Technical analysis: XRP price could sweep liquidity at $0.56 and begin recovery

XRP price has formed three consecutive lower highs and lower lows in April, as seen on the XRP/USDT 4-hour chart. The altcoin’s descent will likely result in a sweep of liquidity at the $0.5673 support, the March 20 low and a key level on the 4-hour chart. Further down, key support level on the daily chart is $0.5386, the February 22 low.

XRP price has sustained above the two key supports for nearly a month now. 

If XRP price collects liquidity at the $0.5673 support, the altcoin is likely to bounce back and fill the Fair Value Gap (FVG) formed between $0.6030 and $0.6103 (4-hour timeframe). There is another FVG that could likely get filled, between the $0.6185 and $0.6204 levels on the daily timeframe. 

The Relative Strength Index (RSI) reads 36.19, close to the oversold region at and below 30. 

XRP

XRP/USDT 4-hour chart 

A 4-hour candlestick close above the psychologically important $0.60 level could invalidate the thesis of an initial decline in XRP. The altcoin could rally towards the FVGs and fill the inefficiencies on both the 4-hour and daily timeframes. XRP price could face resistance at $0.6147, the 50% Fibonacci placeholder of the climb from its January 31 low of $0.4853 to the March 11 peak of $0.7440. 

 

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.

 


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