- XRP got legal clarity from Judge Torres’ ruling in the SEC vs. Ripple lawsuit, but since the news the altcoin has wiped out all gains.
- XRP whales holding between 100,000 and 1,000,000 XRP tokens have shed their holdings over the past two months.
- Ripple XRP price is tethered to 200-day EMA at $0.5251, the altcoin faces the possibility of a 7% decline.
XRP is one of the only altcoins in the crypto ecosystem, after Bitcoin and Ethereum, to receive legal clarity in a lawsuit ruling. The altcoin attained the status of a non-security, through Judge Torres’ ruling in the SEC vs. Ripple lawsuit. However, XRP price wiped out its gains and risks a decline to support at $0.4600.
Whales have consistently shed their holdings of the token over the past two months, adding to the selling pressure on the asset.
Ripple XRP price wipes out all gains despite legal clarity
In the SEC vs. Ripple lawsuit, Judge Torres declared a partial win for the payment firm and considered XRP a “non-security.” Following Judge Torres’ ruling, Judge Failla in the recent Uniswap lawsuit referred to Bitcoin and Ethereum as commodities and not “securities”.
The legal clarity on the status of these digital assets has fueled bullish sentiment among the crypto community of holders and acted as a bullish catalyst for asset prices. However, in the case of XRP, the price gains were wiped out soon enough with developments in the lawsuit and other macroeconomic developments in the economy.
XRP price resumed its downward trend, and the asset is currently tethered to its 200-day Exponential Moving Average (EMA) at $0.5251.
XRP price decline supported by on-chain metric
Whale accumulation is considered a typical bullish indicator. Similarly, when whales shed their holdings of an asset, it foreshadows an upcoming correction in the asset. XRP whales holding between 100,000 and 1,000,000 XRP tokens have consistently reduced their token holdings and redistributed them, adding to the selling pressure on the asset.
This chart from on-chain intelligence tracker Santiment shows the state of whale holdings over the past two months.
Whales holding between 100,000 and 1,000,000 XRP tokens vs price
XRP price risks 7% decline
Lockridge Okoth, a technical analyst at FXStreet, analyzed the XRP price chart and noted that the altcoin needs to break its tether to the 200-day EMA at $0.5251 to make the next move. Since August 18, XRP price has been in a state of consolidation, and there is a probability of dipping into the demand zone between $0.5040 and $0.4600. A decisive daily candlestick close below the mean threshold at $0.4800 strengthens the downward trend of the asset, and XRP risks a drop to $0.4191.
XRP/USDT one-day price chart on Binance
If XRP price breaches the 50 and 100-day EMAs at $0.5813 and $0.5646, a sustained uptrend to the $0.6840 level is likely.
SEC vs Ripple lawsuit FAQs
It depends on the transaction, according to a court ruling released on July 14:
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 will need to keep litigating over the around $729 million it received under written contracts.
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 are likely to 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.
The court decision is a partial summary judgment. The ruling can be appealed once a final judgment is issued or if the judge allows it before then. The case is in a pretrial phase, in which both Ripple and the SEC still have the chance to settle.
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