XRP rallied 3.11% on Wednesday, ending the session at $0.6405.
Optimism toward the SEC v Ripple case resurfaced despite the threat of the SEC appealing the Programmatic Sales ruling.
SEC v Ripple and Coinbase case-related news will remain focal points on Thursday.
The Wednesday Overview
On Wednesday, XRP rallied 3.11%. After a 0.48% decline on Tuesday, XRP ended the session at $0.6405. In contrast, the total crypto market cap declined by 0.82% to $1,554 billion.
Optimism Toward the SEC v Ripple Case Sends XRP to $0.64
There were no SEC v Ripple case-related for investors to consider on Wednesday. However, the SEC and Ripple are progressing through remedies-related discovery. Investor hopes for a favorable settlement fueled buyer demand on Wednesday.
The SEC will attempt to scoop up the $770 million from XRP sales to institutional investors. However, case law suggests a significantly lower penalty.
Morrison v NAB: The US Supreme Court ruled the SEC only has jurisdiction over US-based sales. During remedies-related discovery, XRP will demonstrate the amount of XRP sales to US institutional investors.
Liu v SEC: The court ruled a disgorgement amount must not exceed the net profits and must go to the victims. Ripple will deduct expenses associated with the sale of XRP to US institutional investors to derive net profits.
SEC v Govil: The court ruled the SEC cannot demand a punitive disgorgement without demonstrating the financial impact of the XRP sales on investors. If the price of XRP is higher than at the time of sales to institutional investors, there was no harm to investors. Ripple will look to demonstrate the uptrend in the price of XRP before, during, and after the sale of XRP to institutional investors.
With case law on the side of the Defendant, the SEC could settle before the conclusion of discovery. A favorable settlement would be a boon for XRP and the crypto market. However, XRP could face another period of uncertainty.
The SEC will likely appeal the court ruling on the Programmatic Sales of XRP. Significantly, the appeal process would likely extend into 2025, possibly leaving XRP in limbo for another year.
However, the outcome of the SEC v Coinbase (COIN) case could alter the SEC’s plans to appeal against the ruling.
SEC v Coinbase: The Coinbase Motion to Dismiss Ruling
On January 17, 2024, the SEC and Coinbase will deliver oral arguments regarding the Coinbase motion to dismiss (MTD). Coinbase argues the SEC lacks the statutory authority to regulate crypto exchanges. If Judge Katherine Failla grants the MTD, the SEC would lose its bid to classify cryptos traded on exchange as securities.
The outcome of the SEC v Coinbase case could significantly impact the US crypto market. Another SEC loss may incentivize US lawmakers to roll out a US crypto regulatory framework favoring innovation while protecting investors.
XRP Price Action
XRPUSD 071223 Weekly Chart
XRP held above the 50-day and 200-day EMAs, affirming bullish price signals.
An XRP return to $0.65 would support a move toward the $0.7047 resistance level.
SEC v Coinbase and Ripple case-related news are the focal points on Thursday.
However, a fall through the $0.6354 support level would give the bears a run at the 50-day EMA. A break below the 50-day EMA would bring the $0.5835 support level into view.
The 14-day RSI reading of 57.56 suggests an XRP move through the $0.65 handle before entering overbought territory.
XRPUSD 071223 Daily Chart
On the 4-hourly, XRP held above the 50-day and 200-day EMAs, reaffirming bullish price signals.
A move to $0.65 would bring the $0.7047 resistance level into view.
However, a break below the $0.6354 support level would bring the 50-day and 200-day EMAs into play.
The 4-hourly RSI, with a reading of 62.06, suggests a return to the $0.65 handle before entering overbought territory.
With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.