Ripple’s native token, XRP, suddenly fell in price on Wednesday, October 2, after the US SEC appealed a court ruling that had previously favored Ripple. This impulsive reversal wiped out 11% of the cryptocurrency’s value, sending it from a recent high of $0.66 to a low of $0.5075. This decline was in stark contrast to the early optimism of investors who predicted a possible bullish breakout in cryptocurrencies.
Notably, the timing of this appeal comes after a brief bull run in which XRP challenged resistance levels around $0.66 earlier in the week and prices last seen in mid-March 2023. It is. However, the SEC’s legal action has altcoin investors wondering whether the token will be able to bounce back and regain lost ground.
After the appeal, XRP’s market capitalization decreased to $29.354 billion, but the token still maintained its position as the seventh largest cryptocurrency by market capitalization. Although the price of the token fell, trading volume soared. Within 24 hours, trading activity increased by more than 7.30%, reaching $3.15 billion.
This increase in volume was primarily due to profit-taking as market participants reacted to renewed regulatory uncertainty surrounding Ripple’s ongoing legal battle with the SEC, increasing the volatility of the cryptocurrency’s market performance. This is thought to be due to.
Ripple’s legal response and its impact
The SEC’s appeal was filed Wednesday in Manhattan’s Second Circuit Court of Appeals following a July 2023 ruling by Judge Annalisa Torres. The ruling found that Ripple violated federal securities laws through the sale of XRP to institutional investors and imposed a $125 million fine. , a far cry from the $2 billion the SEC originally sought.
(1) The SEC’s appellate decision is disappointing but not surprising. This only prolongs a situation that is already completely embarrassing for the agency. The court has already rejected the SEC’s suggestion that Ripple acted recklessly, there is no allegation of fraud, and of course… https://t.co/PQozMMtthf
— Stuart Alderoty (@s_alderoty) October 2, 2024
In response to the appeal, Ripple’s chief legal officer Stuart Alderroti expressed disappointment, but said the appeal was expected. According to reports, Ripple claims that the SEC’s lawsuit is unreasonable and misguided and is considering a cross-appeal. On the other hand, the market outlook for virtual currencies remains skeptical, and price fluctuations are expected as regulations evolve.
Technical Analysis: XRP Chart Pattern Signal Integration
On the technical side, the recent price trend of XRP shows a symmetrical triangle shape on the weekly chart. This pattern, formed by a series of falling highs and rising lows, generally indicates a period of consolidation. Price movements for tokens within this formation are likely to remain subdued until a definitive breakout occurs.
On the other hand, indicators such as RSI and MACD are showing signs of possible further decline. The RSI is below the signal line at 47.24, suggesting a bearish trend. Similarly, the MACD line is nearing a crossover with the signal line, suggesting a possible change in momentum. These indicators signal a cautious tone in the market, with traders expecting further price consolidation before any major moves occur.
Key support and resistance levels
The immediate support level for XRP is currently hovering around $0.50. Analysts have warned that if this support fails, the token could fall to $0.43, with further declines leading to a return to July lows of $0.38. Conversely, if XRP is able to break above the symmetrical triangle, it could retest the key resistance levels of $0.66 and $0.74.
However, if there is a favorable legal outcome for Ripple in the SEC appeal, the cryptocurrency could skyrocket, with bullish predictions targeting the $1.0 level. However, until legal proceedings provide more clarity, altcoin price movements are likely to remain heavily influenced by regulatory news and broader market sentiment.
Also read: XRP Whale Releases 285 Million Coins Amid SEC Appeal, What’s Next?
