XRP exchange supply dwindles, paves way for 10% gains in Ripple price
|- XRP supply on exchanges is on a steady decline, signaling a decline in selling pressure per Santiment data.
- Ripple started testing its stablecoin in private beta, while traders digest SEC lawsuit ruling.
- XRP whales drop their tokens, while retail traders accumulate since last week’s crypto crash.
- XRP extends gains to $0.57 and eyes 10% rally to $0.63 in a bullish scenario.
Ripple (XRP) shared positive developments with traders in the past week, following the end of the Securities & Exchange Commission (SEC) lawsuit against the firm. XRP erased its losses and held steady above key support at $0.57 on Tuesday.
On-chain metrics show bullish potential in the native token of the XRP Ledger amid other positive developments in the ecosystem.
Daily digest market movers: XRP on-chain metrics support bullish thesis
- Santiment data shows that XRP supply on exchanges is on a steady decline. As XRP tokens held on exchange wallets reduce, there is less availability of the token to sell, reducing the selling pressure on the asset.
- Dwindling exchange supply is, therefore, considered a sign of potential gains in the altcoin price.
XRP supply on exchanges vs. price
- XRP large wallet investors have shed their token holdings, while retail holders accumulate the asset, even as Ripple extends gains. Santiment data shows XRP supply distribution in the last week.
XRP supply distribution vs. price
- Ripple started its private beta testing for stablecoin RippleUSD (RUSD). The firm informed traders that the token is not available for trading or sale since regulatory approval awaits.
Technical analysis: XRP eyes 20% gains
Ripple is in a multi-month downward trend as seen in the XRP/USDT daily chart. XRP extends gains on Tuesday, up to $0.5744 at the time of writing. XRP could extend gains by 10.21% and rally toward the $0.63 target.
The $0.63 level is key to XRP, and the altcoin faces resistance at the psychologically important $0.60 level. The Relative Strength Index (RSI) reads 52, signaling positive momentum in XRP price trend.
XRP/USDT daily chart
XRP could find support in the Fair Value Gap (FVG) between $0.5888 and $0.5785 in a bearish scenario.
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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