XRP stays above $0.50 while Ripple backs research on new frontiers in blockchain technology
|- Ripple highlighted study from its University Blockchain Research Initiative on the latest developments in blockchain.
- The research outlines challenges faced by blockchains like XRP Ledger, against fast-evolving quantum computing.
- XRP sustained its gains, holds steady above key support at $0.50 on Monday.
XRP price holds steady above the $0.50 key support level and edges higher on Monday, trading at 0.5130 and rising 0.70% in the day at the time of writing. Ripple (XRP) published its research from its University Blockchain Research Initiative (UBRI) on the intersection of blockchain and quantum computing. The May 17 report on Ripple’s website surveys the impact of quantum computing technology and its advancement on blockchains like the XRP Ledger, which is key to future technical developments in the firm’s network.
XRP holders await a ruling in the Securities and Exchange Commission (SEC) vs. Ripple lawsuit on two major issues: the fine to be imposed on the payment remittance firm for allegedly selling securities (XRP) to institutional investors and an injunction on Ripple’s On-Demand Liquidity (ODL) platform, used by clients to manage liquidity.
Daily Digest Market Movers: Ripple supports technical development-focused research
- Ripple funds a University Blockchain Research Initiative to aid research and development in new frontiers of blockchain technology.
- The payment remittance firm published a report on May 17, highlighting a leading cause for concern among scholars in the sector, quantum computing and its impact on blockchains like the XRP Ledger.
- A Deloitte report titled “Quantum computers and the Bitcoin blockchain” shares the concern and reads:
- “…the security of cryptocurrencies is threatened by future quantum computers, which are expected to break some of the currently used cryptography algorithms for which there are no clear replacements.”
- In other words, advancements in quantum computing pose a threat to Bitcoin and other encrypted blockchains that rely on cryptography for security.
- Ripple dives into these issues in its Ripple Insights series.
- The SEC vs. Ripple lawsuit is another key catalyst influencing XRP price on Monday.
- XRP holders are awaiting a ruling on two major issues: a fine (the SEC proposed a $2 billion fine on Ripple for alleged violations of securities laws and sale of XRP to institutions, Ripple countered with a $10 million offer), and a likely injunction (order to stop) the sale of XRP to institutional investors through its On-Demand Liquidity (ODL) platform.
- Data from Cryptoeq.io shows that the sentiment among XRP holders is positive on Monday.
Technical analysis: XRP poised for correction on longer timeframe
Ripple is likely to correct further as seen in the 1-week XRP/USDT price chart. While XRP sustained above key support at $0.50, the long timeframe chart shows bearish signs from indicators.
The Moving Average Convergence Divergence (MACD), a momentum indicator, flashes red histogram bars below the neutral line, corresponding to the decline in XRP price between April 8 and May 20. A recent crossover of MACD below the signal line supports a bearish thesis for XRP.
XRP price could suffer a nearly 9% drop to the April 19 low at $0.4665. Once the altcoin sweeps liquidity at this level, it could reattempt a recovery, depending on signs from technical indicators this week.
XRP/USDT 1-week chart
On the 1-day timeframe, XRP could attempt to test resistance at $0.5310, the 50% Fibonacci retracement of the decline from the April 9 top of $0.6431 to the April 13 low at $0.4188. A failure to break above this resistance could see XRP testing support at the key level of $0.50. XRP price has consistently closed above support at $0.50 throughout last week.
The MACD supports a short-term bullish thesis on the 1-day chart, as seen below.
XRP/USDT 1-day chart
Looking up, clearing the resistance at $0.5310 paves the way for XRP to test the May 7 high at $0.5443 (nearly 6% gains from current levels) and target the April 4 low at $0.5623.
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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