XRP whales buy the dip while Ripple on-chain activity fades
|- Ripple whales holding 100 million and a higher volume of XRP tokens are buying the dip in June.
- Active addresses decline by nearly 40% in June, down to 19,500 on June 11.
- XRP wipes out nearly 2% of value on Tuesday, down to $0.4885.
Ripple (XRP) whales in different segments holding 100 million and higher tokens have added to their holdings during the recent dip. XRP price has been down nearly 6% since June 1, and large wallet investors are buying the dip.
Ripple has noted a decline in its on-chain activity amidst the price correction.
Daily Digest Market Movers: Ripple on-chain activity declines in June
- The active addresses metric is considered an indicator of a blockchain network’s usage. The metric could see a correlation with price as higher active addresses typically mark periods of increased demand.
- Ripple’s active addresses dropped nearly 40% in June, down to the 19,500 level on June 11, as noted by Santiment’s on-chain intelligence tracker. The decline fuels a bearish narrative for XRP.
XRP active addresses vs. price
- Ripple’s supply distribution metric shows that large wallet investors in three segments, holding between 1 million to 10 million; 100 million to 1 billion and higher volume of XRP tokens have added to their wallets in June.
- The XRP volume held by the three segments of whale wallets increased by nearly 2% between June 1 and 10, as seen in the chart below.
XRP whale supply distribution
- On-chain metrics paint a bearish picture for XRP, fueling a narrative of correction in the altcoin’s price.
Technical analysis: XRP poised for nearly 7% correction
Ripple is likely to correct another 7% in its decline, as seen in the XRP/USDT 1-day chart. The altcoin wiped out nearly 2% of its value on Tuesday. At the time of writing, the XRP price is $0.4876 on Binance.
Ripple could find support at the June 7 low of $0.4508, down nearly 7% from the current price level. $0.4665, the April 19 low of XRP, could act as another support in Ripple’s decline.
The Relative Strength Index (RSI) is down to 35.03, dropping towards the oversold level at 30. The signal line crossed above the Moving Average Convergence Divergence (MACD) on Thursday, June 6, in a bearish move. Red histogram bars below the neutral line in MACD support a bearish thesis for Ripple.
XRP/USDT 1-day chart
Ripple could see a daily candlestick close above the June 10 high of $0.5060; this could invalidate the bearish thesis. XRP could target the 50% Fibonacci retracement, at $0.5310, of the decline between the April 9 top of $0.6431 and the April 13 low of $0.4188.
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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