- Ripple traders shed their holdings at nearly $40 million loss in the crypto market crash on Monday.
- XRP noted a decline in address activity as traders lost interest after mass sell-off.
- XRP sustained above $0.50 on August 7, nearly a 10% decline is likely.
Ripple (XRP) made a comeback above key support at $0.50 after the recent correction in the crypto market. On-chain data shows traders losing interest in the altcoin after a massive sell-off event on August 5.
Santiment data shows traders realized millions in losses, a likely sign of capitulation.
Daily digest market movers: Ripple traders dump holdings at a loss
- Santiment data shows Ripple holders shed their XRP at $38.3 million in losses on Wednesday, the single largest capitulation event in the altcoin since May 1, 2024.
- The Network Realized Profit/Loss metric measures the net profit/loss realized by all traders who moved the asset on a given day. The large negative spike on August 5 is, therefore, indicative of the losses realized on the day of the massive crypto crash on Monday.
- XRP traders have realized gains since then, per NPL data from Santiment.
 [22.42.25, 07 Aug, 2024]-638586512333603293.png)
XRP NPL vs. price
- The address activity metric used to track demand for the asset and trader interest shows a decline since the correction. This supports a bearish thesis for the asset, per Santiment data.
 [22.43.14, 07 Aug, 2024]-638586512664495273.png)
XRP active addresses vs. price
- Ripple announced its $10 million investment in tokenized US Treasury bills, RippleX Bug Bounty Program and partnership with DIFC Innovation Hub. Despite the series of positive announcements, the altcoin's price remains stuck around the resistance at $0.50.
Technical analysis: XRP could extend losses by nearly 10%
Ripple is in a downward trend that started on July 19, 2023, and since then the asset has attempted to break out of the decline, with no success. XRP slipped to a low of $0.43 on August 5 and recovered above $0.50 early on Wednesday.
The Moving Average Convergence Divergence (MACD) indicator shows red histogram bars under the neutral line, meaning the underlying momentum in Ripple price is negative. XRP could extend losses by nearly 10% and slip to $0.45, the lower boundary of a Fair Value Gap (FVG) seen in the XRP/USDT daily chart.
XRP/USDT daily chart
A daily candlestick close above $0.52 could invalidate the bearish thesis, and XRP could advance toward the $0.60 target.
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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