XRP News: The SEC v Ripple Final Push – Legal Battle and Regulatory Risks

Key Insights:

• XRP gained 0.02% on Tuesday, ending the session at $0.6188.
• US regulatory risk remains a headwind as the battle to regulate the US crypto space intensifies.
• On Wednesday, focal points include US regulatory chatter, SEC activity, and SEC v crypto case-related news.

The Tuesday Overview

On Tuesday, XRP gained 0.02%. After a 6.50% slide on Monday, XRP ended the day at $0.6188.

SEC v Ripple Silence a Headwind

There was no SEC v Ripple case-related news for investors to digest on Tuesday. The SEC and Ripple entered the final stage of the case in November. Remedies-related discovery ends on February 12, 2024.

The discovery process gives Ripple the opportunity to water down the $770 million in XRP sales to institutional investors. In contrast, the SEC will look for ways to scoop a punitive disgorgement. Considering the stakes, a pre-February settlement remains elusive.

The lack of progress toward a settlement leaves an SEC appeal of the Programmatic Sales of XRP ruling in the distance. However, an appeal is likely, barring US legislation addressing the securities law issue.

Significantly, the prospect of an appeal and the uncertainty about the outcome exposes XRP to regulatory risk.

Senator Elizabeth Warren and SEC Chair Gary Gensler Remain Focal Points

On Tuesday, amicus curiae attorney John E. Deaton revisited the recent Senator Elizabeth Warren press release. Discussing the latest move against the US digital asset space, Deaton said,

“Her bill is a BIG deal. NINE US Senators have joined her, including Republicans and Independents. As I’ve said, if you’re talking about people, Elizabeth Warren is the single biggest threat to Crypto in the United States. It’s not Gensler because Gensler takes his marching orders from Warren.”

Notably, Senator Warren has a poor record of sponsoring successful bills. However, increasing anti-crypto rhetoric on Capitol Hill could give the Digital Asset Anti-Money Laundering Act a chance.

While the bill may not directly impact XRP, the impact on US crypto exchanges could be significant. The bill could directly impact the SEC vs. Coinbase (COIN) case. Imposing banking regulations onto the digital asset space would give the SEC statutory authority to regulate crypto exchanges.

In August, Coinbase filed a motion to dismiss (MTD). Coinbase argued the SEC lacked the statutory authority to regulate crypto exchanges. Senator Warren’s bill could address the issue of statutory authority for the SEC.

However, Senator Elizabeth Warren is not the only vocal Senator on Capitol Hill. In August, Senator Cynthia Lummis filed an amicus brief supporting the Coinbase MTD. Notably, Senators Lummis and Kirsten Gillibrand introduced the Responsible Financial Innovation Act in 2022, proposing the CFTC has more authority over the digital asset space.

Updates on the passage of the two bills could materially influence XRP and the crypto market.

XRP Price Action

Daily Chart

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

An XRP break above the $0.6354 resistance level would support a move to the $0.7047 resistance level.

SEC v Crypto case-related news, US lawmaker comments, and SEC activity remain focal points.

However, a fall through the 50-day EMA would bring the $0.5835 support level into play.

The 14-day RSI reading, 46.02, indicates a drop to the $0.5835 support level before entering oversold territory.

4-Hourly Chart

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

An XRP move through the 200-day EMA would support a break above the 50-day EMA and the $0.6354 resistance level. However, selling pressure could intensify at $0.6350. The 50-day EMA is confluent with the $0.6354 resistance level.

However, an XRP fall through the $0.60 handle would bring the $0.5835 support level into play.

The 4-hourly RSI, with a reading of 37.40, indicates an XRP fall to the $0.60 handle before entering oversold territory.