Ripple price could kickstart 140% rally to $1.23 after SEC's “surrender”

SEC calls it quits 

On July 13, the US Securities and Exchange Commission scored a major defeat against Ripple in its lawsuit. This major development caused a massive rally in XRP price that pushed it up by nearly 100% to $0.938. 

While this lawsuit’s decision was a historic win not just for the Ripple and XRP community but for the cryptocurrency industry as a whole. But as of October 19, the commission has decided to end the cases against Ripple’s CEO, Brad Garlinghouse and Executive Chairman Chris Larsen. 

While these are two victories in Ripple’s corner, the SEC is still likely to pursue the main SEC vs. Ripple lawsuit, which claims XRP sales to institutions were unauthorized distribution of securities. But the recent filing states that,

The SEC and Ripple intend to meet and confer on a potential briefing schedule with respect to the pending issue in the case – what remedies are proper against Ripple for its Section 5 violations with respect to its Institutional Sales of XRP.”

If this meet does go in favor of Ripple, it would be a major fundamental boost to XRP and could even catalyze a rally. 

Read more: XRP price likely to rally as investors grow their holdings, Ripple CTO challenges US SEC about Ethereum

Ripple price could blast higher

With the fundamental aspects in mind, the Ripple (XRP) price currently stands at $0.512. Judging from the past, XRP price has always formed an inverse head-and-shoulder pattern before a massive volatile move to the upside. 

Read more: XRP Price Prediction: SEC vs. Ripple lawsuit’s 100% rally could be just the start

Currently, on the weekly time frame, Ripple price is once again setting up a potential inverse head-and-shoulders pattern. This technical formation has three distinctive swing lows, with the central one deeper than the other two, known as the head. The ones on either side of the head are termed shoulders. Connecting the peaks between the valleys using a trend line shows a declining resistance level, in this case, known as the neckline.

A decisive breakout or a flip of the neckline into a support floor will confirm the start of an uptrend. In such a case, the target is obtained by measuring the distance between the right shoulder’s peak and the head’s lowest point. Adding this value to the breakout point reveals the target. 

For Ripple price, however, things are different. The right shoulder is yet to form, hence, the inverse head-and-shoulders setup is not yet confirmed. For confirmation, the XRP price needs to rally nearly 50% from the current position and retest the neckline. Assuming the remittance token ends its consolidation and kickstarts 

After the 50%, if  Ripple price produces a decisive breakout above the neckline, the measurement rule suggests that a 60% rally to $1.234 is on the cards. 

In total, this move would constitute a 140% rally from the current position of $0.513.

XRP/USDT 1-week chart

On the other hand, if the ongoing Ripple price consolidation breaks below the $0.413 support level, it would invalidate the inverse head-and-shoulders setup. This move will distort the technical formation’s measurements as it could easily trigger a correction in XRP price to the $0.333 level, which is close to the head’s lowest point.