Can XRP bounce back? SEC actions may favor Ripple in ongoing appeal
- The SEC transferred a top litigator involved in the agency's case against Ripple to its IT department.
- SEC Commissioner Hester Peirce said the agency is reviewing which crypto assets fall under securities classification.
- XRP could see a recovery and stage a rally to $4.00 if it holds the lower broadening wedge boundary.
XRP is down 3% in the early hours of Thursday as crypto community members anticipate that the Securities and Exchange Commission's (SEC) appeal of the ruling in its case with Ripple will likely not stand following latest developments under the new administration.
Ripple vs. SEC case likely over with latest changes within the agency
Crypto community members are speculating that the Ripple vs SEC case is potentially over, considering the latest developments in the agency.
In a restructuring under acting Chair Mark Uyeda, the SEC is reducing its Crypto and Cyber Unit, which consists of over 50 lawyers and staff members, according to a New York Times report.
Jorge Tenreiro, the former deputy chief of the Crypto and Cyber Unit and a top crypto litigator in the previous administration, was reassigned to the IT department, according to another report by the Wall Street Journal.
Tenreiro was involved in over half a dozen lawsuits against crypto firms, including Ripple and Coinbase.
He was moved alongside a lawyer who was "involved in writing controversial accounting guidelines" that prevented banks from providing custody services for digital assets, the report states.
With such high-ranking crypto litigators reassigned, it's likely that the agency won't pursue its appeal against Ripple.
The recent developments follow the departure of former Chair Gary Gensler from the agency, who spearheaded a "regulation by enforcement" system against the crypto industry.
Meanwhile, SEC Commissioner Hester Peirce, head of the agency's new Crypto Task Force, published a statement on Tuesday highlighting new reforms concerning digital assets. Peirce stated that the task force will review crypto assets and activities to determine the ones that fall under securities classification.
If the task force doesn't see XRP as a security, it will likely put an end to the SEC's appeal against Judge Analisa Torres's ruling in its case against Ripple.
The agency argued that Judge Torres wrongly ruled that XRP sales to retail investors do not constitute securities.
Ripple's XRP needs to hold support line of a wedge to stage a recovery
XRP experienced $11.68 million in futures liquidations in the past 24 hours, per Coinglass data. The total amount of liquidated long and short positions accounted for $7.90 million and $3.78 million, respectively.
XRP is trading within a descending broadening wedge pattern on the daily chart following its recent decline. This wedge is considered a bullish pattern and signals a potential reversal if XRP holds the lower boundary support line.
XRP/USDT daily chart
If XRP bounces off the wedge's lower support line and overcomes the upper boundary line, it could rally to a new all-time high of $4.00. The level is obtained by measuring the distance between the highest and lowest point of the wedge and projecting it upward from a potential breakout level.
However, the remittance-based token could face key hurdles near the 14-day Exponential Moving Average (EMA) and the $2.72, $2.95, $3.40 and $3.55 resistance levels.
On the downside, XRP could find support at $1.35 if it sees a firm close below the wedge's lower boundary line.
The Relative Strength Index (RSI), Stochastic Oscillator (Stoch) and Moving Average Convergence Divergence (MACD) momentum indicators are below their neutral levels, indicating dominant bearish momentum. A cross above the neutral level will strengthen the bullish thesis.
Ripple FAQs
Ripple is a payments company that specializes in cross-border remittance. The company does this by leveraging blockchain technology. RippleNet is a network used for payments transfer created by Ripple Labs Inc. and is open to financial institutions worldwide. The company also leverages the XRP token.
XRP is the native token of the decentralized blockchain XRPLedger. The token is used by Ripple Labs to facilitate transactions on the XRPLedger, helping financial institutions transfer value in a borderless manner. XRP therefore facilitates trustless and instant payments on the XRPLedger chain, helping financial firms save on the cost of transacting worldwide.
XRPLedger is based on a distributed ledger technology and the blockchain using XRP to power transactions. The ledger is different from other blockchains as it has a built-in inflammatory protocol that helps fight spam and distributed denial-of-service (DDOS) attacks. The XRPL is maintained by a peer-to-peer network known as the global XRP Ledger community.
XRP uses the interledger standard. This is a blockchain protocol that aids payments across different networks. For instance, XRP’s blockchain can connect the ledgers of two or more banks. This effectively removes intermediaries and the need for centralization in the system. XRP acts as the native token of the XRPLedger blockchain engineered by Jed McCaleb, Arthur Britto and David Schwartz.
Author
Michael Ebiekutan
FXStreet
With a deep passion for web3 technology, he's collaborated with industry-leading brands like Mara, ITAK, and FXStreet in delivering groundbreaking reports on web3's transformative potential across diverse sectors. In addi
