Ripple’s native token, XRP, saw a sudden price drop on Wednesday, October 2, after the U.S. SEC filed an appeal against a court ruling that had previously worked in Ripple’s favor. This impulsive reversal wiped out 11% of the cryptocurrency’s value, causing it to fall from its recent high of $0.66 to a low of $0.5075. The slip marked a stark contrast to the earlier optimism among investors, who had anticipated a possible bullish breakout for the cryptocurrency.
Notably, the timing of the appeal comes after XRP’s brief bull run earlier in the week, when it challenged its resistance level around the $0.66 mark, a price last seen in mid-March 2023. However, with the SEC’s legal maneuver, altcoin investors have been left wondering whether the token can bounce back and reclaim its lost ground.
Following the appeal, XRP’s market capitalization dropped to $29.354 billion, though the token still held its position as the seventh-largest cryptocurrency by market cap. While the token’s price stumbled, its trading volume surged. Within 24 hours, trading activity climbed by over 7.30%, hitting $3.15 billion.
This increase in volume can be attributed mainly to profit-taking as market participants reacted to the renewed regulatory uncertainty surrounding Ripple’s ongoing legal battle with the SEC, adding to the volatility in the cryptocurrency’s market performance.
Ripple’s Legal Response and Implications
The SEC’s appeal was submitted to the Second Circuit Court of Appeals in Manhattan on Wednesday, following a decision by Judge Analisa Torres in July 2023. That ruling determined that Ripple had violated federal securities laws through institutional sales of XRP, resulting in a $125 million penalty, a far cry from the $2 billion the SEC initially sought.
(1) The SEC’s decision to appeal is disappointing, but not surprising. This just prolongs what’s already a complete embarrassment for the agency. The Court already rejected the SEC’s suggestion that Ripple acted recklessly, and there were no allegations of fraud and, of course,… https://t.co/PQozMMtthf
— Stuart Alderoty (@s_alderoty) October 2, 2024
In response to this appeal, Ripple’s chief legal officer, Stuart Alderoty, expressed disappointment but noted the appeal was expected. According to reports, Ripple is considering filing a cross-appeal, maintaining that the SEC’s lawsuit is irrational and misguided. Meanwhile, the cryptocurrency’s market outlook remains skeptical, with price fluctuations expected as regulatory developments continue to unfold.
Technical Analysis: XRP’s Chart Patterns Signal Consolidation
On the technical side, XRP’s recent price action reveals a symmetrical triangle on the weekly chart. This pattern, created by a series of lower highs and higher lows, generally points to a consolidation period. The token’s price movement within this formation will likely remain constrained until a decisive breakout occurs.
On the other hand, indicators like the RSI and the MACD show signs of possible further downside. Standing at 47.24, the RSI has dipped below the signal line, suggesting a bearish trend. Similarly, the MACD line is nearing a crossover with its signal line, implying a possible shift in momentum. These indicators point to a cautious market stance, with traders expecting further price consolidation before any major movement occurs.
Key Support and Resistance Levels
XRP’s immediate support level now hovers around the $0.50 mark. Should this support fail, analysts warn that the token could slip to $0.43, with a further decline potentially leading it back to its July low of $0.38. On the flip side, if XRP can break above the symmetrical triangle, it may retest the key resistance levels of $0.66 and $0.74.
However, in the event of a favorable legal outcome for Ripple in the SEC appeal, the cryptocurrency could rally sharply, with bullish projections targeting the $1.0 level. However, until more clarity emerges from the legal proceedings, the altcoin’s price movement will likely remain heavily influenced by regulatory news and broader market sentiment.
Also Read: XRP Whales Dump 285M Coins Amid SEC Appeal, What’s Next?
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