XRP News Today: Scrutiny Over Coinbase Ruling Intensifies Amid SEC vs. Ripple Battle

The Monday Overview

On Monday, XRP slid by 2.86%. Reversing a 1.29% gain from Sunday, XRP ended the session at $0.6119.

US Economic Indicators and US Treasury Yields Impact XRP

On Monday, better-than-expected US ISM Manufacturing PMI numbers for March impacted riskier assets. The ISM Manufacturing PMI increased from 47.8 to 50.3 in March. Economists forecast a rise to 48.4. US Treasuries reacted to the numbers, with 10-year Treasury yields climbing 2.54%.

The numbers likely influenced the US BTC-spot ETF market.

BTC-Spot ETF Market Outflows Surprised the Crypto Market

US BTC-spot ETF market outflow data for Grayscale Bitcoin Trust (GBTC) surprised investors. On Monday, GBTC saw net outflows of $303 million, testing buyer demand for BTC and the broader crypto market.

The figures for Monday coincided with ongoing uncertainty about the SEC vs. Ripple case.

SEC vs. Crypto-Related News Continued to Draw Scrutiny

There were no SEC vs. Ripple case-related updates to influence buyer appetite for XRP on Monday.

However, the crypto community continued scrutinizing a recent court ruling in the SEC vs. Coinbase (COIN) case. On March 27, Judge Katherine Failla partially granted the Coinbase Motion to Dismiss (MTD). Judge Failla did not grant the MTD for charges against Coinbase for operating as an unregistered securities exchange.

The SEC vs. Coinbase case could set a legal precedent before an SEC appeal against the Programmatic Sales of XRP ruling. Amicus Curiae attorney John E. Deaton believed the SEC would settle the Ripple case if Judge Failla granted the Coinbase MTD.

Ripple Chief Legal Officer Stuart Alderoty delved deeper into the March 27 ruling on Monday. Alderoty highlighted concerns about the Coinbase ruling, saying,

“Last week’s Coinbase decision has 4 different confusing definitions of what constitutes a crypto “ecosystem.”

In the court ruling, Judge Failla stated,

“In the instant Complaint, the SEC uses the term “ecosystem” in its narrower sense, to refer to the coordinated enterprises contemplated by the issuers and promoters of the thirteen crypto-assets at issue here. This Court uses the term similarly in its analysis of whether transactions in these crypto-assets qualify as “securities” under the federal securities law.”

Alderoty added,

“If this sounds like legal gibberish… it is. According to the SEC, whenever you acquire a token you are always investing in an amorphous “ecosystem” regardless of why, how, or where you acquired it.”

Referring to the Programmatic Sales of XRP ruling, Alderoty concluded,

“Once Judge Torres in the Ripple case (Ivy League educated, with Bronx street sense) looked at the full evidentiary record, she understood the SEC had strayed far from “Howey” where a promoter made promises directly to investors about a clearly defined enterprise.”

Legal Precedent Absent for Coinbase and Ripple

The interpretation of Howey and the matter of investment contracts and enterprises remains a matter for the courts to address. Until now, there has been no precedent for crypto exchanges offering cryptos for sale in a secondary market with no investment contracts.

In the Programmatic Sales ruling, Judge Analisa Torres opined that,

“Ripple’s Programmatic Sales were blind bid/ask transactions, and Programmatic Buyers could not have known if their payments of money went to Ripple, or any other seller of XRP. […] Since 2017, Ripple’s Programmatic Sales represented less than 1% of the global XRP trading volume. […] Therefore, the vast majority of individuals who purchased XRP from digital asset exchanges did not invest their money in Ripple at all.”

Unfortunately, Judge Torres clearly stated the Programmatic Sales ruling cannot set a precedent in future crypto-related cases. The SEC vs. Coinbase case is significant for the US digital asset space and the crypto market in general.

The lack of a US crypto regulatory framework and legal precedent will be a headwind for XRP and the broader market.

XRP Price Action

Daily Chart

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

An XRP return to the $0.62 handle could give the bulls a run at the $0.6609 resistance level. A break above the $0.6609 resistance level would support a move toward the $0.70 handle.

Investors must track crypto case-related chatter and SEC activity.

Conversely, a break below the 50-day EMA could give the bears a run at the 200-day EMA and the $0.5740 support level.

The 14-day RSI reading, 47.66, indicates an XRP fall to the $0.5740 support level before entering oversold territory.

4-Hourly Chart

On the 4-hourly, XRP hovered below the 50-day and 200-day EMAs. The EMAs sent bearish price signals.

A break above the 200-day and 50-day EMAs would give the bulls a run at the $0.6609 resistance level.

However, a drop below the $0.60 handle would bring the $0.5740 support level into play.

The 4-hourly RSI, with a reading of 41.24, suggests an XRP fall to the $0.5740 support level before entering oversold territory.