XRP News Today: Regulatory Hurdles Cloud XRP-Spot ETF Outlook

The Friday Overview

On Friday, XRP slid by 5.23%. Following a 2.97% decline on Thursday, XRP ended the session at $0.6337.

US Lawmakers Call on the SEC to Decline Other Crypto ETFs

US lawmakers targeted BTC and the US BTC-spot ETF market this week. Fox Business journalist Eleanor Terrett shared a letter from lawmakers to SEC Chair Gary Gensler.

Senators Jack Reed and Laphonza Butler, both Democrats, urged Gensler to restrict the expansion of the crypto-spot ETF market, saying,

“We believe the SEC should strictly limit the precedential application of these approvals. While the bitcoin market has displayed serious weakness, it is nonetheless far more established and scrutinized than the market for any other cryptocurrency. However, vulnerable bitcoin may be to fraud and manipulation, markets for other cryptocurrencies are far more exposed to misconduct.”

The Senators further raised concerns about market surveillance and emphasized the importance of safeguarding retail investors from thinly traded cryptocurrencies and those vulnerable to pump-and-dump schemes.

Uncertainty about the SEC approving the ETH-spot ETF applications intensified in recent weeks. Hopes of an XRP-spot ETF market have also faded. The letter to Chair Gensler could further impact investor hopes of an XRP-spot ETF approval.

SEC intentions to appeal the ruling on the Programmatic Sales of XRP would justify the inclination to reject altcoin ETF applications. In July 2023, Judge Analisa Torres ruled that programmatic sales of XRP do not satisfy the third prong of the Howey Test.

Spot ETF issuers are unlikely to submit XRP-spot ETF applications until the end of the appeals process. The ongoing SEC v Ripple case is in its final stages. Judge Torres could deliver a summer ruling on the Penalty for breaching Section 5 of the 1933 Securities Act. Crypto experts believe an appeal against the Programmatic Sales ruling could extend the case into 2025.

External Market Forces May Expedite an XRP-Spot ETF Market

For investors hoping for an XRP-spot ETF market, the SEC’s pathway to a successful appeal is uncertain.

Should the SEC proceed with the appeals process, it could eventually escalate to the US Supreme Court. In November, Ripple CEO Brad Garlinghouse expressed optimism about an appeal, 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.”

Possible roadblocks to an SEC appeal against the Programmatic Sales ruling include,

• SEC v Coinbase case (COIN): Investors await a court ruling on the Coinbase Motion to Dismiss (MTD). Coinbase filed an MTD in August, arguing the SEC lacks the statutory authority to regulate crypto exchanges. If Judge Katherine Failla grants the MTD, the SEC may have to step back from regulating the US digital asset space through enforcement.
• Office of Inspector General (OIG) investigation into crypto conflicts of interest within the SEC. If the OIG finds evidence of wrongdoing, US lawmakers may force the SEC to step back from overseeing the US crypto market. The investigation involves former SEC Director William Hinman, who became a central figure in the SEC v Ripple case.
• US Presidential Election: A Republican Party victory could force a change at the top of the SEC. Republican front-runner Trump recently softened his stance on crypto. A crypto-friendly SEC Chair could abruptly end ongoing cases against US digital asset firms not involved in fraudulent activity.

XRP Price Action

Daily Chart

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

An XRP break above the $0.6609 resistance level would support a move to the $0.70 handle. A breakout from the $0.70 handle would give the bulls a run at the $0.7467 resistance level.

SEC vs. crypto news, crypto-spot ETF news, and OIG investigation-related updates need investor consideration.

However, a break below the 50-day EMA could signal a fall to the trend line and the $0.5740 support level.

The 14-day RSI reading, 53.84, suggests an XRP return to the $0.70 handle before entering overbought territory.

4-Hourly Chart

On the 4-hourly, XRP sat below the 50-day EMA while holding above the 200-day EMA. The EMAs sent bearish near-term but bullish longer-term price signals.

An XRP breakout from the 50-day EMA would bring the $0.6609 resistance level into play.

However, a fall through the 200-day EMA could give the bears a run at the trend line and the 0.5740 support level.

The 4-hourly RSI, with a reading of 43.25, indicates an XRP fall to the $0.5740 support level before entering oversold territory.