XRP News: SEC v Ripple Behind-the-Scenes Activity a Focal Point

Key Insights:

• XRP gained 3.03% on Wednesday, ending the session at $0.6486.
• Market sentiment toward Fed monetary policy and the US economy supported a broad-based crypto rally.
• On Thursday, SEC v Ripple case-related chatter and crypto-spot ETF news will be the focal points.

The Wednesday Overview

On Wednesday, XRP gained 3.03%. After a 6.13% loss on Tuesday, XRP ended the day at $0.6486.

Broad-based Crypto Rally Offers XRP Price Support

On Wednesday, there were no SEC v Ripple case-related updates for investors to consider. The lack of updates left XRP in the hands of the broader crypto market. Rising bets on the Fed ending its rate hike cycle and the prospects of rate cuts in 2024 fueled demand for riskier assets.

The crypto market responded late to US inflation figures from Tuesday. Softer-than-expected US inflation fueled a US equity market rally on Tuesday. Fake XRP-spot ETF news and crypto-spot ETF-related news likely distracted investors. However, better-than-expected US retail sales figures on Wednesday eased fears of a hard landing, bringing the Fed into focus again.

Crypto-spot ETF-related news contributed to the upside. On Wednesday, news hit the wires of the SEC delaying the Hashdex application to convert a BTC futures ETF to a BTC futures and spot ETF.

The crypto markets responded favorably to the news, with a delay supporting hopes of progress toward a BTC-spot ETF market.

SEC v Ripple Case on Ice

While XRP responded to broader market moves, the SEC v Ripple case is on ice until the New Year. According to the court scheduling order, the SEC and Ripple must complete remedies-related discovery by February 12, 2024.

The first significant date is March 13, 2024, when the SEC must file its brief concerning remedies. For XRP, the brief will be the first show of intent on how aggressively the SEC will pursue any appeals.

Proposals for punitive penalties around of the $770 million figure could surprise the markets. As background, the SEC is eyeing a potential $770 million disgorgement. The $770 million represents total XRP sales to institutional investors.

On Wednesday, CryptoLaw US and amicus curiae attorney John E. Deaton discussed the likelihood of a $770 million penalty. Deaton cited two case laws that suggest the penalty could be significantly lower. However, Judge Analisa Torres will ultimately decide the penalty. Beyond case law, two things in Ripple’s favor include no fraudulent activity and few, if any, victims of XRP sales to institutional investors.

While the case is on ice as the discovery proceeds, case-related news will influence the appetite for XRP.

XRP Price Action

Daily Chart

XRP remained above the 50-day and 200-day EMAs, sending bullish price signals.

An XRP return to $0.65 would support a move toward the $0.7047 resistance level. However, XRP must break down resistance at the Tuesday high of $0.6720 to target $0.70.

SEC v Ripple case-related chatter and movement across the broader market will likely influence buyer demand.

If XRP falls below the $0.6354 support levels, the trend line and 50-day EMA could come into play. Buying appetite could intensify at $0.5880. The 50-day EMA is confluent with the trend line.

The 14-day RSI reading of 58.59 suggests an XRP return to $0.67 before entering overbought territory.

4-Hourly Chart

In the 4-hourly Chart, XRP remains below the 50-day EMA while sitting above the 200-day EMA, sending bearish near-term but bullish longer-term price signals.

An XRP break above the 50-day EMA would give the bulls a run at the $0.7047 resistance level.

However, a break below the $0.6354 support level would bring the 200-day EMA into play.

The 4-hourly RSI, with a reading of 47.78, suggests an XRP fall through $0.6150 before entering oversold territory.