XRP News: SEC v Ripple and Falling Bets on an XRP-Spot ETF Impact XRP

Key Insights:

• XRP declined by 1.63% on Tuesday, ending the session at $0.5181.
• XRP-spot ETF-related chatter continues to impact buyer demand as the SEC v Ripple case progresses in the courts.
• On Wednesday, SEC v crypto, SEC activity, and US lawmaker scrutiny need consideration.

The Tuesday Overview

On Tuesday, XRP declined by 1.63%. Following a 3.62% slide on Monday, XRP ended the session at $0.5181.

XRP-Spot ETF Chatter Impact Buyer Demand

On Tuesday, XRP joined the broader crypto market in negative territory. However, uncertainty about the SEC approving an XRP-spot ETF continued to impact buyer demand for XRP.

Significantly, the BlackRock (BLK) plan to launch an XRP-spot ETF could face significant regulatory scrutiny. The SEC v Ripple case is unlikely to conclude until the summer. The SEC and Ripple are progressing through remedies-related discovery. Remedies-related discovery ends on February 12, 2024.

After remedies-related discovery, the SEC and Ripple must file remedy-related briefs. The parties will argue for and against a punitive penalty for XRP sales to US institutional investors. In July, Judge Analisa Torres gave Ripple a partial win, ruling that XRP is not a security in Programmatic Sales.

However, Judge Torres also ruled Ripple breached Section 5 of the 1933 Securities Act for failing to register XRP as a security for institutional sales.

For BlackRock, Fidelity, and other issuers, including Grayscale, SEC plans to appeal the Programmatic Sales ruling is another hurdle.

Given the SEC’s appeal plans, it’s unlikely that SEC Chair Gary Gensler will approve an XRP-spot ETF. Spot ETF issuers may wait until the SEC formally acknowledges that XRP is not a security before filing applications. An acknowledgment could hinge on the courts.

Considering the Court Briefing Schedule for the final stages of the SEC v Ripple case, an SEC appeal could extend into 2025. Significantly, XRP could lose out to any crypto tokens that the SEC deems securities.

The SEC v Terraform Labs ruling fueled uncertainty about an XRP-spot ETF market. In December, Judge Jed Rakoff ruled Luna and TerraUSD are securities. The court ruling will likely incentivize the SEC to appeal against the Programmatic Sales ruling.

XRP Price Action

Daily Chart

XRP sat below the 50-day and 200-day EMAs, sending bearish price signals. Significantly, the 50-day EMA continued narrowing on the 200-day EMA, another bearish sign.

A return to the $0.52 handle would support a move to the $0.5470 resistance level. A break above the $0.5470 resistance level would bring the 200-day EMA into view.

SEC v Crypto case-related news and US lawmaker scrutiny need consideration.

However, a break below the $0.5042 support level would support a fall toward the $0.4700 support level.

The 14-day RSI reading, 30.28, shows XRP on the border with oversold territory. Buying pressure could intensify at the $0.5042 support level.

4-Hourly Chart

On the 4-hourly, XRP remained below the 50-day and 200-day EMAs, confirming the bearish price trends.

A break above the Tuesday high of $0.5315 would support a move toward the $0.5470 resistance level.

However, a fall through the $0.5042 support level would give the bears a run at the $0.4700 support level.

The 4-hourly RSI, with a reading of 34.84, suggests a fall through the $0.5042 support level before entering oversold territory.