Ripple’s XRP has once again fallen under bearish territory. The debate regarding XRP’s security status and speculations surrounding the Securities and Exchange Commission’s (SEC) appeal on the recent case have created selling pressure that has sent the altcoin just above a critical price level.
Ripple May Soon Face A Tough Time
The recent decision by U.S. District Judge Jed Rakoff in the Terraform Labs case could have significant implications for Ripple’s XRP price. The judge’s refusal to differentiate cryptocurrencies based on their method of sale challenges the previous ruling in the Ripple case, which had a significant impact on XRP’s market behavior.
In the Ripple case, tokens sold directly to institutional investors were considered securities, while those sold through secondary markets to retail investors were not. This distinction led to a degree of market certainty, as it provided a framework for how XRP and similar tokens could be traded and regulated.
However, Judge Rakoff’s decision introduces a new level of uncertainty into the market. If all tokens, regardless of how they are sold, could be considered securities, this could lead to stricter regulations and potentially limit the trading of tokens like XRP. This uncertainty could create selling pressure on XRP, leading to a decrease in its price.
Moreover, XRP experienced a substantial increase in liquidation over the past two days as its price approached the significant $0.7 mark. Data from Coinglass reveals that total liquidation for XRP exceeded $8 million due to price volatility around this critical level. With the price recently falling below $0.7, bullish traders liquidated nearly $5 million worth of positions. This action exerted downward pressure on the price, causing it to drop further.
What’s Next For XRP Price?
Today, buyers pushed the XRP price toward $0.72 in an effort to trigger a bullish breakout, but bears quickly emerged to open short-positions and drove the price below the 23.6% Fib channel. Despite the successful defense of the support level by the bulls, a robust recovery has yet to commence. As of writing, XRP price trades at $0.69, declining over 1.45% in the last 24 hours.
Bulls are currently defending a decline below $0.67 as a breakdown will send the price to an extended bearish trend. The slowly declining 20-day EMA at $0.7 and the RSI below the signal line territory suggest a slight advantage for the bears. If the price dips and falls below the $0.67 level, it would indicate that every minor increase is being sold off. The price could then decline further from $0.65 and reach the support of $0.58. If this support fails, the price might continue its decline and consolidate at $0.55-$0.56.
If the buyers can break through the $0.75 barrier, the XRP price may initiate a relief rally toward the resistance at $0.85.