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- XRP has witnessed heavy losses since the beginning of the week, dropping nearly 15% as the crypto market stretches its losses.
- Ripple community members continue to expect an end to the SEC’s multi-year lawsuit as the agency closes another investigation.
- XRP could hold the support near $2.18, aiming for a bounce to tackle a descending triangle’s resistance.
Ripple’s XRP declined toward the $2 level on Wednesday as Trump’s tariff threats on international trading partners sparked double-digit losses across top cryptocurrencies in the past three days.
Meanwhile, community members strongly anticipate the Securities & Exchange Commission (SEC) will drop its case against Ripple amid a growing dismissal of legal cases against companies in the crypto sector.
SEC accelerates dismissal of cases against crypto companies but drags feet on Ripple’s case
In the past week, the crypto industry has witnessed the new SEC administration scale down its enforcement actions against crypto companies.
The new administration has recently closed several legal cases, including enforcement investigations and actions.
These various legal proceedings were initiated under former SEC Chair Gary Gensler’s administration, which was tagged anti-crypto by many.
The agency dismissed its multi-year case against the crypto exchange Coinbase and dropped legal action against the NFT marketplace OpenSea on Friday with no further charges.
Robinhood Crypto joined the list on Monday after the SEC dropped its investigation into the company.
Uniswap was next on the line on Tuesday, while Gemini joined the train on Wednesday.
The SEC’s action to end these cases reflects the agency’s attempt to implement regulatory frameworks favoring crypto companies.
Meanwhile, crypto community members also anticipate an end to the SEC’s extended lawsuit against Ripple following its recent actions.
The SEC vs. Ripple case is among the regulatory battles that have garnered much attention over the years.
Ending the case against Ripple may be more complicated than the cases that the agency dismissed in the past week. A judge has already rendered a verdict in this case, and the SEC filed an appeal prior to Gensler’s resignation on January 20.
As a result, the lingering case still casts a shadow over XRP’s price, which has seen steady declines in the past few days.
XRP is down over 4% at the time of writing, stretching its weekly performance to a double-digit decline.
XRP could hold $2.18 support amid the crypto market crash
XRP saw $13.18 million in futures liquidations in the past 24 hours, per Coinglass data. The total amount of liquidated long and short positions accounted for $10.18 million and $3 million, respectively.
XRP has declined over 15% since seeing a rejection near the descending trendline of a descending triangle.
XRP/USDT daily chart
The remittance-based token is looking to hold the $2.18 level as support following the recent wider bearish crypto market pressure.
If XRP holds this level, it could bounce to test the triangle resistance. A sustained breakout above the triangle could flip the market trend bullish for XRP.
On the downside, XRP could bounce off the $1.96 support if it fails to hold the $2.18 level. A decline below $1.96 will accelerate the bearish pressure.
The Relative Strength Index (RSI) and Stochastic Oscillator (Stoch) are near their oversold region, indicating dominant bearish momentum and a potential reason for reversal.
SEC vs Ripple lawsuit FAQs
It depends on the transaction, according to a court ruling released on July 14, 2023: 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 had to pay a $125 million civil fine.
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 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.