XRP struggles under $0.47, Ripple holders capitulate for ninth consecutive day
- Ripple holders realized losses on their XRP tokens for the ninth consecutive day on Thursday.
- Traders have taken over $41 million in losses since June 18, according to Santiment data.
- XRP hovers around $0.47, wiping out over 5% in value in the past seven days.
Ripple (XRP) holds the recent decline at around $0.47 on Thursday. On-chain data shows that different cohorts of XRP investors reacted differently to the price decline, with whales holding between 1 million and 10 million XRP distributing their token holdings at a loss.
Typically, an asset is expected to recover after a capitulation.
Daily digest market movers: Ripple on-chain data shows traders are realizing losses
- Ripple on-chain data from tracker Santiment shows that XRP investors took over $41 million in unrealized losses between June 18 and June 27, as shown in the chart below.
- The negative spikes in the Network Realized Profit/oLss metric show the losses taken by XRP traders in the past nine days. Consistent realization of losses by traders is considered typical of a capitulation.
 [15.07.58, 27 Jun, 2024]-638550845652244358.png)
Network realized profit/ loss vs. price
- Different segments of XRP investors reacted differently to the price decline. Wallet addresses holding between 10,000 and 100,000 XRP tokens and 100,000 and 1 million coins accumulated the asset, buying the dip.
- The group of investors holding between 1 million and 10 million XRP distributed their holdings at a loss. Typically, this segment is associated with capitulation prior to recovery in the asset’s price, as seen in the chart below.
 [15.38.27, 27 Jun, 2024]-638550846153740138.png)
XRP supply distribution
- In the absence of an update in the SEC vs. Ripple lawsuit, traders are watching Bitcoin price trends for cues to determine where XRP is headed.
- XRP is hovering around $0.47, down nearly 5% in the past seven days.
Technical analysis: Ripple likely to extend losses by 3.5%
Ripple is in a downward trend, hovering around the $0.47 level on Thursday. If the decline resumes, XRP is likely to touch support at $0.4508, the June 7 low. In the event of a recovery in the altcoin’s price, XRP could fill the Fair Value Gap between $0.4731 and $0.4710 before resuming its downward trend.
The Moving Average Convergence Divergence (MACD) indicator supports the bearish thesis, with the signal line crossing above the MACD line and the red histogram bars under the neutral line. There is underlying negative momentum in Ripple’s price trend.
XRP/USDT daily chart
Ripple’s close above the Fair Value Gap between $0.4825 and $0.4841 could invalidate the bearish thesis and push XRP higher toward the resistance at $0.4955.
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.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
