- Ripple holders have shed their XRP holdings and realized over $30 million in losses since June 15.
- XRP token supply on exchanges is down to 2.84 million in the same timeframe.
- XRP struggles to surge past $0.48 on Tuesday.
Ripple’s price (XRP) struggles to hold above $0.48 on Tuesday and seems ready to extend its recent decline. According to Santiment data, investors have realized losses on their token holdings in the past ten days. This is typical of market capitulation, with traders likely distributing their tokens at a loss and expecting a decline in the asset’s price.
XRP has steadily declined since the June 17 high of $0.5213, down to $0.47 on Tuesday.
Daily digest market movers: Ripple holders take losses in recent XRP price dip
- Ripple traders distributed their XRP holdings at a loss between June 15 and June 25, Santiment data shows.
- The Network Realized Profit/Loss (NPL) metric shows negative spikes in the timeframe, losses exceed $30 million in the ten-day period.
- Distribution of token holdings at a loss is typically a sign of market capitulation.
- However, in the case of XRP, the supply on exchanges has declined in the past ten days.
- 2.84 million XRP tokens are held on exchanges, down nearly 1% in the same period, signaling a reduction in selling pressure on the altcoin.
- The Santiment chart below shows the decline in exchange supply and the NPL vs. XRP price.
 [14.19.32, 25 Jun, 2024]-638549145050951155.png)
XRP NPL, supply on exchanges and price
- Developments in the SEC vs. Ripple lawsuit are typical market movers for the token.
- There has been no update since the SEC’s response to Ripple on June 14, in which the regulator quotes a $102.6 million fine for the payment remittance firm’s alleged securities violation.
- A California Judge recently dismissed all class action lawsuits against the firm except for one against CEO Brad Garlinghouse, a partial win for Ripple, amidst the long-drawn legal battle with the SEC.
Technical analysis: XRP drops below $0.48
Ripple started its downward trend on March 11, wiping out over 35% of its value till June 25. XRP price trades around $0.4750 on Tuesday, and the altcoin is likely to extend its losses and dip to support at $0.4508, the June 7 low.
Ripple’s drop to $0.4508 would mark a 5% correction in the altcoin’s price. If XRP extends losses further, it could find support at the April 13 low of $0.4188 for an additional 7% fall.
Moving Average Convergence Divergence (MACD) indicator supports the bearish thesis. The red histogram bars below the neutral line signal the underlying negative momentum in Ripple’s price trend.
On the contrary, a daily candlestick close above $0.4955, the 23.6% Fibonacci retracement of the decline between the March 11 top of $0.7440 and the April 13 low of $0.4188 could invalidate the bearish thesis.
XRP/USDT daily chart
If Ripple price closes above the resistance at $0.4955, XRP could target the Fair Value Gap between $0.5008 and $0.5164. Further up, the next key resistance is $0.5330, the June 5 high.
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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