XRP News: SEC Courtroom Activity Impacts XRP Despite Optimistic Outlooks

Key Insights:

• XRP slid by 3.62% on Monday, ending the session at $0.5267.
• Uncertainty about SEC plans to appeal the Programmatic Sales ruling brings sub-$0.50 into view.
• On Tuesday, US lawmaker scrutiny, SEC v crypto case-related news, and the SEC need consideration.

The Monday Overview

On Monday, XRP slid by 3.62%. After a 1.23% loss on Sunday, XRP ended the session at $0.5267.

SEC v Ripple: Uncertainty about an SEC Appeal Remains a Headwind

On Monday, there were no SEC v Ripple case-related updates for consideration. The lack of case-related activity left investors waiting for a court ruling on the SEC Motion to Compel. On January 11, the SEC requested the court to order Ripple to provide financial statements for 2022-23 and post-complaint contracts governing XRP institutional sales.

Ripple opposed the motion to compel on Friday, January 19, leaving Judge Analisa Torres to decide whether post-complaint activity is relevant. The SEC appears to be hoping for further breaches of Section 5 of the 1933 Securities Act. More breaches could persuade Judge Torres to impose a more punitive disgorgement.

In July, Judge Torres ruled Ripple breached Section 5 of the 1933 Securities Act when selling XRP to sophisticated investors and entities.

With the SEC v Ripple case in its final stages, SEC plans to appeal the Programmatic Sales ruling remain a headwind. In December, Judge Rakoff ruled Lune and TerraUSD to be securities in the SEC v Terraform Labs case. The court ruling created uncertainty about the chances of an SEC win on appeal.

Considering the Court briefing schedule in the SEC v Ripple case, the SEC could appeal the Programmatic Sales ruling in the summer. However, the SEC v Coinbase (COIN) remains a curveball for the SEC and the US crypto market.

SEC v Coinbase: The Crypto Market Curveball

On January 17, the SEC and Coinbase presented oral arguments at a hearing on the Coinbase motion to dismiss (MTD).

Legal experts tilted the chances of a win toward Coinbase. Bloomberg Intelligence Senior Litigation Analyst Elliot Z Stein recently gave Coinbase a 70% chance of winning.

Stein became more optimistic after hearing SEC and Coinbase definitions of investment contracts. Stein viewed the Coinbase definition as more convincing. Significantly, Stein also believes the case could reach the US Supreme Court, which could limit the use of Howey.

Ripple CEO Brad Garlinghouse recently shared his views on the SEC appeal of the Programmatic Sales ruling reaching the Supreme Court, saying,

“The current Supreme Court, we’d love to see the Vegas odds on how that would go. They have not been friendly to regulators.”

In the near term, investors must monitor the news wires for SEC v crypto case-related updates. Rulings on the SEC Motion to Compel and Coinbase MTD need consideration.

XRP Price Action

Daily Chart

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

An XRP break above the $0.5470 resistance level would give the bulls a run at the 200-day EMA. An XRP move through the 200-day EMA would bring the $0.5835 resistance level and 50-day EMA into play. Selling pressure could intensify at the $0.5835 resistance level. The 50-day EMA is confluent with the $0.5835 resistance level.

SEC activity, SEC v Crypto case-related chatter, and US lawmaker scrutiny need consideration.

However, a fall through the $0.52 handle would bring the $0.5042 support level into play.

The 14-day RSI reading, 32.51, suggests an XRP fall through the $0.52 handle before entering oversold territory.

4-Hourly Chart

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

An XRP break above the $0.5470 resistance level would bring the 50-day EMA into play.

However, a break below the $0.52 handle would support a fall to the $0.5042 support level.

The 4-hourly RSI, with a reading of 26.02, shows XRP in oversold territory. Buying pressure could intensify at the $0.52 handle.