The position of XRP in the market as a cryptocurrency and not a security token is once again in question following a recent ruling made by SDNY District Judge Jed Rakoff, which allows the Securities and Exchange Commission (SEC) to carry on with the lawsuit against Terraform Labs and its founder D Kwon.
Legal representatives of Terraform and Kwon had filed a motion to dismiss the SEC’s case, citing the ruling made in the Ripple vs SEC lawsuit.
Judge Rakoff did not give any regard to the early July ruling, delivered by Judge Analisa Torres, which distinguished between institutional XRP sales and public sales, such as those on third-party exchanges like Coinbase and Binance.
The judge asserted that the regulator has jurisdiction to proceed with the case which would determine if Kwon and his company Terraform violated security laws.
Newsflash: Ripple Decision Already in (Big) Trouble
SDNY District Judge Jed Rakoff today allowed the SEC to go forward with its case against Terraform Labs and founder Do Kwon. In doing so, Judge Rakoff specifically rejected the distinction made in the Ripple case between public… pic.twitter.com/JZZ8vukfFt
— John Reed Stark (@JohnReedStark) July 31, 2023
Meanwhile, XRP down 2.4% in the last 24 hours, is trading at $0.6881. The turbulence in the market cuts across the board with Bitcoin price falling by 1.6% to 28,932 while Ethereum is holding firmly to support at $1,830 following a 1.7% drop.
How Far Can XRP Price Tumble?
Attempts to push XRP price to $1 have been futile despite the Ripple ruling, which deemed XRP not a security token but particularly for sales made via exchanges. While the token rallied substantively to trade highs of $0.93, it has generally wobbled within the range stretching from $0.68 and $0.85.
XRP price has in the last few weeks been confined in the lower range of the channel, thus putting a lot of pressure on support at $0.68. It is essential for bulls to keep this support intact, otherwise, sellers could tap sell the signal from the Moving Average Convergence Divergence (MACD) indicator.
Such a bearish call compels traders to close their long positions and open short positions and is characterized by the MACD line in blue flipping below the signal line in red. The bearish outlook in XRP becomes more apparent with the momentum indicator sliding toward the mean line (0.00) of further below it.
While recovery from the range resistance at $0.68 cannot be ruled out, traders need to be cautious keeping in mind the support turned hurdle at the 100-day Exponential Moving Average (EMA) (blue) at $0.6977.
A sustained break above $0.7 would mean that the range support is sturdy enough to arrest potential declines, possibly averting an impending sell-off, with the Ripple ruling seemingly in trouble.
Traders who may be eyeing new exposure to XRP longs should be on the lookout for gains above $0.7 – the resistance level at the 100-day EMA. A sharp spike in volume may follow, which is crucial for the climb to $0.75 as well as the range high of $0.85.
Declines below the immediate $0.68 support might extend to revisit the 200-day EMA and if push comes to shove due to investors selling in panic, XRP price could sweep the liquidity at $0.6 before resuming the uptrend to $1.
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The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
