XRP News: Investors Await SEC v Coinbase and Ripple Court Rulings

Key Insights:

• XRP declined by 1.23% on Sunday, ending the session at $0.5465.
• Crypto legal experts continue to discuss the SEC v Coinbase hearing as investors await a pivotal court ruling.
• On Monday, SEC v crypto case-related updates, US lawmaker scrutiny, and SEC activity need monitoring. 

The Sunday Overview

On Sunday, XRP declined by 1.23%. Partially reversing a 1.65% gain from Saturday, XRP ended the session at $0.5465.

SEC v Ripple: Judge Ruling on SEC Motion to Compel

There was no SEC v Ripple case-related news to influence investors on Sunday. However, investors await a court ruling on the SEC Motion to Compel and the opposition filing to the Motion to Compel.

The SEC may have asked for post-complaint documents to argue a more punitive penalty for XRP sales to sophisticated US investors and entities. In July, Judge Analisa Torres ruled Ripple breached Section 5 of the 1933 Securities Act when selling XRP to sophisticated investors and entities.

If Judge Torres orders Ripple to provide the documents, further breaches of Section 5 of the 1933 Securities Act could impact sentiment toward XRP.

Significantly, SEC plans to appeal the Programmatic Sales of XRP ruling remains a headwind. In October, Judge Torres denied the SEC motion for interlocutory appeal, forcing the SEC to wait until the end of the SEC v Ripple case before filing an appeal.

The outcome of an appeal could impact the US crypto market. However, the ongoing SEC v Coinbase (COIN) case remained the hot topic of discussion.

SEC v Coinbase: Ripple CLO Alderoty Targets the SEC Lawyers

Crypto legal experts continued to share views about the SEC v Coinbase hearing from January 17, 2024.

Ripple Chief Legal Officer Stuart Alderoty posted more views about the hearing, saying,

“Last week (in Coinbase), the SEC told the Court that the question is “whether investors are “pooling [their] capital with the promoter’s efforts.” That’s wrong. Howey demands more than investing in efforts. You have to invest in a common enterprise. Revak (2d Cir. 1984).”

Alderoty shared the transcript from the hearing, where the SEC lawyer said,

“I just want to bring it back to Howey compels us to look at the economic reality of whether investors are giving up their capital and pooling that capital with the promotor’s efforts. That’s exactly what’s being done here.”

The purpose of the hearing was for Judge Katherine Failla to hear oral arguments on the Coinbase motion to dismiss (MTD). Coinbase filed the MTD in August, arguing the SEC lacks the statutory authority to regulate crypto exchanges.

The level of interest in the hearing highlights the significance of the SEC v Coinbase case. If Judge Failla grants the MTD, the SEC would have to step back from regulating crypto exchanges by enforcement. Significantly, a Coinbase win could affect the chances of the SEC winning an appeal against the XRP Programmatic Sales ruling.

On Friday, Bloomberg Intelligence Senior Litigation Analyst Elliot Z. Stein had this to say about the hearing,

“I went into SEC v. Coinbase hearing thinking COIN would, on this motion, win dismissal of SEC’s primary claims (concerning trading) but maybe not staking and broker claims. I left thinking COIN would win full dismissal.”

Stein gave Coinbase a 70% chance of winning, saying the Coinbase definition of investment contract was more convincing. The litigation analyst also believed the case could reach the Supreme Court if it survives. A Supreme Court that limits the use of Howey would be a boon for the US crypto market,

However, investors must await the court ruling on the Coinbase MTD. Stein expects a ruling by the end of the second quarter but noted,

“This judge is extremely efficient so it could be much sooner than that.”

XRP Price Action

Daily Chart

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

An XRP return to the $0.56 handle would support a move to the 200-day EMA and the $0.5835 resistance level. A break above the $0.5835 resistance level would give the bulls a run at the 50-day EMA.

SEC v Crypto case-related chatter, SEC activity, and US lawmaker scrutiny need monitoring.

However, a fall through the $0.5470 support level would bring the $0.5042 support level into play.

The 14-day RSI reading, 38.62, indicates an XRP fall to the $0.52 handle before entering oversold territory.

4-Hourly Chart

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

An XRP breakout from the 50-day EMA would bring the $0.5835 resistance level and 200-day EMA into play.

However, a break below the $0.5470 support level would support a fall toward the $0.5042 support level.

The 4-hourly RSI, with a reading of 42.89, suggests an XRP fall through the $0.52 handle before entering oversold territory.