XRPLedger’s AMM activation could have a positive effect on Ripple, XRP
|- XRPLedger’s Automated Market Maker (AMM) activation will allow XRP holders to earn passive income by providing liquidity.
- XRP holders that provide liquidity to AMMs could receive a proportionate amount of earnings by sharing risk.
- XRP price sustains above the psychologically important $0.60 level on Monday.
XRP struggles to regain the losses suffered the past week, but the altcoin’s price sustains above the $0.60 level as two factors seem to be driving price action. On the one hand, there is the upcoming deadline for the US Securities and Exchange Commission (SEC) opening brief in the lawsuit against Ripple, which has caused a stir among market participants. On the other hand, the amendment for an Automated Market Maker (AMM) on the XRPLedger has been approved.
XRP price is $0.6092A at the time of writing.
Daily digest market movers: XRP, Ripple could see positive impact of AMM
- The decentralized public blockchain XRPLedger will see the activation of an AMM by March 22, 20:10 GMT, according to data from XRPscan. XRP holders are anticipating a positive impact of the development on the altcoin and the payment remittance firm. Find out more about it here.
- The XLS-30D amendment that proposed the activation of an AMM on the ledger offers XRP holders the opportunity to earn passive income by offering liquidity to pools. The key feature of the AMM amendment is that the XRPLedger will be smoothly connected to decentralized exchanges.
- The liquidity staking pool for XRP holders will offer liquidity providers a proportionate amount of earnings as these individuals or entities share the accompanying exchange risk. XRP holders that provide liquidity will get liquidity pool tokens in proportion to their deposits and can vote on the AMM’s trading charge.
- Stedas, a crypto researcher, shared on his X account a detailed guide on how XRP holders can earn passive income from liquidity pools.
XRPLedger AMM. Source: @Stedas on X
- A key deadline in the SEC vs. Ripple lawsuit is approaching. The regulator is preparing its opening remedies-related brief for March 22. Developments in the lawsuit impact XRP price since the payment remittance firm is one of the largest public holders of the altcoin.
Technical Analysis: XRP price sustains above $0.60, further correction is likely
XRP price is trading broadly sideways since it hit its 2024 peak at $.6685 on March 5.
The altcoin could correct to $0.5553, the 38.2% Fibonacci retracement of the rally to the 2024 high. A sweep of this support level is likely as momentum indicators such as, Moving Average Convergence/Divergence (MACD) and Awesome Oscillator (AO) signal a correction is likely in the altcoin.
The red bars on the AO and the MACD signal that the uptrend is likely in jeopardy and there is a lack of positive momentum. XRP price is therefore likely to see a decline before a meaningful recovery in the altcoin.
XRP/USDT 1-day chart
A daily candlestick close above $0.6293, the 78.6% Fibonacci retracement level, could invalidate the bearish thesis for XRP. The next key resistance is the 2024 peak of $0.6685.
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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