XRP News Today: Investors Watch Ripple Case Closely, Bet on Fed Cuts

The Monday Overview

On Monday (June 3), XRP advanced by 1.29%. Reversing a 1.14% loss from Sunday (June 2), XRP closed the session at $0.5195.

Fed Rate Cut Bets, US Politics, and SEC vs. Ripple Angst

On Monday, investors reacted to US ISM Manufacturing PMI numbers that signaled a more marked contraction across the manufacturing sector.

The ISM Manufacturing PMI fell from 49.2 to 48.7 in May, fueling bets on a September Fed rate cut. According to the CME FedWatch Tool, the chances of the Fed leaving interest rates unchanged fell from 45.2 (May 31) to 38.4% (June 3).

Hopes of Republican Party victory also contributed to the positive session, with crypto firms making contributions to support pro-crypto US lawmakers on Capitol Hill.

On Monday, Coinbase (COIN) donated $25 million to Fairshake, following contributions from Ripple and Andreessen Horowitz. Coinbase announced the donation in a company blog. According to the website, Fairshake PAC supports US candidates committed to securing the US as the home to innovators building the next generation of the internet.

The Coinbase blog discussed US politics and the races in the House, the Senate, and the Presidential Election. Notably, Coinbase highlighted the significance of the US Presidential Election, saying,

“The presidential race matters as well, because the President makes key appointments in his Administration (such as the SEC Chair, Treasury Secretary, etc) and can veto legislation.”

Last week, US President Joe Biden vetoed the SAB 121 resolution, causing a stir on Capitol Hill and within the crypto community. A crypto-friendly US administration could significantly alter the US crypto landscape with a regulatory framework protecting consumers while fostering innovation. A new SEC Chair could also pave the way to an XRP-spot ETF market.

SEC vs. Ripple: Pending Court Rulings and the Appeal

There were no SEC vs. Ripple case-related updates to affect buyer demand for XRP.

While investors await the court ruling on the Ripple Motion to Seal, the outcome of the SEC vs. Ripple case remains the focal point.

In April, Ripple presented its case for a $10 million penalty for breaching US securities laws in opposition to the SEC push for an almost $2 billion disgorgement.

In March, the SEC also presented the courts with arguments for an injunction prohibiting Ripple from selling XRP to institutional investors. The ruling on an injunction may hinge on whether the court deems that Ripple continued breaching US securities laws after the December 2020 complaint.

Ripple defended its post-complaint sales, arguing that XRP sales were to accredited or institutional investors through ODL contracts. Ripple highlighted that ODL agreements prevented profits or losses. While the courts could consider ODL agreements an investment contract, the prevention of profit or loss may remove the investment component of the contract under Howey.

With Ripple anticipating a verdict in the summer, the threat of the SEC appealing against the Programmatic Sales of XRP ruling lingers. The SEC attempted to appeal the court ruling in August 2023 by filing a Motion for Interlocutory Appeal. However, Judge Analisa Torres rejected the SEC Motion for Interlocutory Appeal in October 2023, forcing the SEC to wait until the end of the Ripple case.

XRP Price Action

Daily Chart

XRP hovered below the 50-day and 200-day EMAs, affirming the bearish price signals.

An XRP break above the 50-day EMA would support a move toward the 200-day EMA. A breakout from the 200-day EMA could give the bulls a run at the $0.5739 resistance level.

Investors should consider SEC vs. crypto case-related updates and SEC activity.

Conversely, an XRP fall through the trend lines could signal a drop toward the $0.48 handle.

The 14-day RSI reading, 48.10, indicates an XRP drop to the $0.48 handle before entering oversold territory.