XRP News: Crypto-Spot ETF Market in the Hands of the Courts and Capitol Hill

Key Insights:

• XRP slid by 5.35% on Friday, ending the session at $0.5700.
• BTC-spot ETF market activity impacted broader crypto market sentiment.
• SEC activity, SEC v crypto case-related news, and US lawmaker scrutiny need monitoring.

The Friday Overview

On Friday, XRP slid by 5.35%. Reversing a 0.18% gain from Thursday, XRP ended the session at $0.5700.

SEC v Ripple: Court Filings Draw Investor Interest

There was no SEC v Ripple case-related news to influence buyer demand for XRP. The SEC and Ripple are progressing through remedies-related discovery. On Thursday, the SEC filed a motion to compel, asking the court to order Ripple to provide financial statements from 2022-2023. The Motion to Compel also requested post-complaint contracts governing institutional sales.

The SEC argued Ripple has no grounds to deny requests for post-complaint documents, saying,

“Courts regularly consider a defendant’s conduct since the violations occurred to determine the likelihood of repetition (for injunctions) and the amount of the pecuniary gain and the need for deterrence (for penalties).”

The SEC stated Ripple’s financial standing and amounts received for XRP sales to institutional investors are significant to deciding a penalty to deter further breaches of securities laws.

Post-complaint breaches could materially influence the court decision on the penalty Ripple must pay for selling XRP to institutional investors. However, it is worth noting that US case law stipulates the SEC only has jurisdiction over XRP sales to US institutional investors.

The SEC and Ripple must complete remedies-related discovery by February 12. With one month remaining, more court filings are likely. However, remedy-related brief filings by March 19, April 12, and April 19 will impact XRP more.

The remedy-related briefs and SEC reply brief filing will present arguments for and against a punitive disgorgement. After the court ruling, the SEC could appeal against the Programmatic Sales of XRP ruling. Uncertainty about the outcome of an appeal could delay the launch of XRP-spot ETFs despite increasing chatter.

XRP-Spot ETF Chatter Fails to Ignite an XRP Rally

Grayscale recently included XRP in its Digital Large Cap Fund (GDLF), raising hopes of the launch of an XRP-spot ETF. Valkyrie Chief Investment Officer Steve McClurg reacted to Grayscale including XRP in the Digital Large Cap Fund, saying that it wouldn’t be surprising to see an XRP or ETH-spot ETF.

However, the SEC also dashed hopes of an ETH-spot ETF market. SEC Chair Gary Gensler issued a statement after the SEC approved the first batch of BTC-spot ETFs, saying,

“Importantly, today’s Commission action is cabined to ETPs holding one non-security commodity, bitcoin. It should in no way signal the Commission’s willingness to approve listing standards for crypto asset securities.”

The classification issue of cryptos in the US remains. A lack of a regulatory framework and more broad-based court rulings on the classification of cryptos could delay the evolution of a crypto-spot ETF market.

BTC-spot ETF-related activity impacted buyer demand for cryptos on Friday. Bloomberg Intelligence ETF analyst James Seyffart shared outflow figures from GBTC, dragging BTC to sub-$43,000.

XRP Price Action

Daily Chart

XRP sat below the 50-day and 200-day EMAs, sending bearish price signals.

An XRP break above the 200-day EMA would support a move through the $0.5835 resistance level. A breakout from the $0.5835 resistance level would bring the 50-day EMA into play.

On Saturday, BTC-spot ETF inflow/outflow numbers, SEC activity, and SEC v crypto case-related news remain the focal points.

However, a fall through the $0.56 handle would give the bears a run at the $0.5470 support level.

The 14-day RSI reading, 41.75, suggests an XRP fall to the $0.5470 support level before entering oversold territory.

4-Hourly Chart

On the 4-hourly, XRP held below the 50-day and 200-day EMAs, affirming bearish price signals.

An XRP break above the $0.5835 resistance level and 50-day EMA would give the bulls a run at the 200-day EMA. Selling pressure could intensify at the $0.5835 resistance level. The 50-day EMA is confluent with the resistance level.

However, a drop below the $0.56 handle would support a fall to the $0.5470 support level.

The 4-hourly RSI, with a reading of 41.18, indicates an XRP break below the $0.5470 support level before entering oversold territory.