XRP News: Regulatory Storm Clouds Gather Amid SEC’s Ripple Lawsuit

Key Insights:

• XRP declined by 0.25% on Wednesday, ending the session at $0.6095.
• A US Department of the Treasury warning to the crypto market left XRP and the broader market under pressure.
• US lawmaker scrutiny and SEC vs. Binance, Coinbase, Kraken, and Ripple case-related updates remain focal points.

The Wednesday Overview

On Wednesday, XRP declined by 0.25%. After a 1.13% gain on Tuesday, XRP ended the session at $0.6095.

SEC v Ripple Remedies-Related Discovery Revisited

There was no SEC v Ripple case-related activity to affect buyer appetite for XRP on Wednesday. Behind the scenes, the SEC and Ripple are in the midst of remedies-related discovery.

The court ordered the SEC and Ripple to complete remedies-related discovery by February 12, 2024. Upon completion of the discovery process, the SEC must file its remedies-related brief by March 13, 2024, and Ripple on or before April 12, 2024.

Remedies-related discovery will furnish the parties with additional information to reach a settlement. Alternatively, the court would deliver a penalty judgment based on presented arguments. The SEC will want to send a message. However, case law may favor Ripple.

In Morrison v NAB, the Supreme Court ruled the SEC only has jurisdiction over US-based sales. XRP sales to institutional investors totaled $770 million.

In discovery, Ripple will demonstrate the proceeds from XRP sales to US institutional investors. Ripple will also detail related expenses to derive net profits from the sale of XRP to US institutional investors.

The final number is a focal point for investors. However, an SEC appeal of the Programmatic Sales ruling could have more influence.

US Government Scrutiny Impacts Bullish Sentiment

US lawmakers and US regulatory scrutiny of the digital asset space remain headwinds for the crypto market.

On Wednesday, the US Deputy Treasury Secretary Wally Adeyemo made the news. Adeyemo sent a warning to crypto firms involved in illicit activities, saying,

“My message is simple: We will find you and hold you accountable.”

Referencing the US DoJ and CFTC case against Binance, the Deputy Treasury Secretary said,

“Binance allowed itself to be used by the perpetrators of child sexual abuse, illegal narcotics trafficking, and terrorism, across more than 100,000 transactions. Groups like Hama, Al Qaeda, and ISIS conducted these transactions.”

The message was loud and clear. Increasing scrutiny may not directly affect Ripple or XRP. However, XRP remains sensitive to regulatory scrutiny as the SEC v Ripple case progresses. Increased scrutiny and anti-crypto sentiment could incentivize the SEC to appeal the Programmatic Sales ruling.

XRP Price Action

Daily Chart

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

An XRP return to $0.62 would support a move to the $0.6354 resistance level and the $0.65 handle.

US lawmakers, SEC activity, and ongoing SEC cases against Binance, Coinbase (COIN), Kraken, and Ripple remain focal points.

However, a fall through the trend line and 50-day EMA would bring the $0.5835 support level into play.

The 14-day RSI reading of 48.24 indicates an XRP fall below the 50-day EMA before entering oversold territory.

4-Hourly Chart

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

An XRP break above the EMAs would support a move to the $0.6354 resistance level.

However, an XRP fall through the trend line would give the bears a run at the $0.5835 support level.

The 4-hourly RSI, with a reading of 44.69, indicates an XRP fall below the trend line before entering oversold territory.