XRP News Today: SEC vs. Ripple Case Update Amidst FOMC Impact

The Wednesday Overview

On Wednesday (May 1), XRP rallied 3.32%. Reversing a 2.87% loss from Tuesday (April 30), XRP closed the session at $0.5172.

The FOMC Interest Rate Decision and Press Conference Deliver XRP Gains

On Wednesday, the FOMC interest rate decision and press conference drove buyer demand for XRP and the broader crypto market.

The Fed left interest rates within the 5.25-5.50% target range. However, Fed Chair Powell poured cold water on further Fed interest rate hikes. Nevertheless, the Fed Chair highlighted the lack of progress on bringing inflation to the 2% target. Investors responded positively to the unlikelihood of a Fed rate hike.

The XRP gains came despite the uncertainty about the SEC vs. Ripple case.

SEC vs. Ripple: SEC Reply Brief Due Date Looming

There were no SEC vs. Ripple case-related updates for investors to consider on Wednesday (May 1).

Investors await an SEC response to the Ripple opposition brief. The SEC must file its reply brief by May 6 and will likely continue to pursue a punitive disgorgement and an injunction. The reply brief filing could be the last court submission before Judge Analisa Torres decides on the penalty for selling unregistered XRP to institutional investors.

The SEC filed its opening brief on March 22, arguing for an almost $2 billion penalty. Moreover, the SEC asked the court to prohibit XRP sales to institutional investors.

Ripple delivered sound legal arguments in its opposition brief. Notably, Ripple argued that post-complaint XRP sales were to accredited investors and through ODL transactions. Sales to accredited investors are exempt from US securities laws. Significantly, ODL agreements prevent profits and losses, addressing the issue of an investment contract.

The US Supreme Court’s Howey case established that,

“An investment contract exists when there is an investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others.”

Investors acquiring XRP for ODL purposes cannot expect profits and do not meet the threshold for an investment contract.

The Ripple arguments suggest the lack of post-complaint breaches of US securities laws. Nevertheless, the SEC will have the final say with its reply brief.

SEC Plans to Appeal and Recent Crypto Court Rulings

While the US courts decide the penalty, investors may begin considering the prospects of an appeal.

In October, Judge Torres rejected an SEC Motion to file interlocutory appeal. Since the ruling, the SEC has expedited the Ripple case to file an appeal against the Programmatic Sales of XRP ruling. After the court denied the SEC motion, the SEC dropped the charges against Ripple co-founder Chris Larsen and CEO Brad Garlinghouse to proceed to remedies-related discovery.

Investors face increasing uncertainty about the outcome of an appeal. In December, Judge Rakoff ruled that TerraformLabs and Do Kwon breached US securities laws by failing to register Luna and TerraUSD. More recently, Judge Failla denied, in large part, the Coinbase (COIN) Motion to Dismiss (MTD).

XRP Price Action

Daily Chart

XRP remained well below the 50-day and 200-day EMAs, sending bearish price signals.

An XRP break above the top trend line would give the bulls a run at the 50-day EMA. A breakout from the 50-day EMA would support a move to the 200-day EMA and $0.5739 resistance level.

SEC vs. Ripple case-related updates need consideration.

Conversely, an XRP break below the bottom trend line could signal a fall to the $0.48 handle. A fall through the $0.48 handle could give the bears a run at the $0.45 handle.

The 14-day RSI reading, 43.70, suggests an XRP fall through the $0.48 handle before entering oversold territory.

4-Hourly Chart

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

An XRP breakout from the top trend line would support a move to the $0.5361 resistance level.

However, a drop below the 50-day EMA and the bottom trend line could bring the $0.48 handle into play. Buying pressure could increase at the bottom trend line. The 50-day EMA is confluent with the bottom trend line.

The 14-day RSI reading, 55.37, indicates an XRP move above the $0.5361 resistance level before entering overbought territory.