XRP dipped by 2.11% but avoided going below $0.52, first since August 16.
Ripple CEO criticizes the SEC, calling it out of control and consistently wrong.
Ripple’s opposition to the SEC motion for interlocutory appeal will affect investor sentiment.
The Wednesday Overview
XRP fell by 2.11% on Wednesday. Partially reversing a 3.25% gain from Tuesday, XRP ended the day at $0.5287. Despite the loss, XRP avoided sub-$0.52 for the first time since August 16.
SEC v Ripple and SEC v Coinbase Uncertainty Leaves XRP in Limbo
As the dust settles from the Grayscale Court victory, investors will likely return their attention to the SEC v Ripple and SEC v Coinbase cases.
The Grayscale victory is significant once the SEC approves sufficient BTC-Spot ETFs and there is a sizeable inflow of institutional money. In contrast, Coinbase (COIN) and Ripple victories will impact the US crypto regulatory landscape and the SEC powers to regulate by enforcement.
By tomorrow, Ripple must file its opposition to the SEC motion for interlocutory appeal. The filing is the part of a four-step process and will influence investor sentiment across the broader market. The SEC will then respond to the Ripple filing before a Court ruling.
A Court ruling in favor of Ripple would refuel hawkish sentiment. However, a Coinbase loss could limit the effects of a Ripple win. The SEC filed charges against Coinbase for operating as an unregistered securities exchange, broker, and clearing agency. An SEC win would give the SEC a free run at US crypto exchanges. A successful SEC appeal of the Judge Torres rulings would make matters worse.
Considering the dynamics, the US digital asset space sits in a precarious position. It is unsurprising investors are quick to take profit on crypto event-driven gains.
Ripple CEO Brad Garlinghouse summed up the US crypto landscape, saying,
“While these are great outcomes… and it’s feeling like a summer of justice… it’s sad that so many in the US crypto community have to resort to the legal process to prove this SEC is out of control and consistently wrong on the facts and the law.”
The Thursday Session
Ripple will likely file their opposition letter to the SEC motion for interlocutory appeal tomorrow. An earlier filing would give the SEC more time to prepare a response. The SEC must respond to any SEC opposition filing by September 8.
A lack of Court activity will leave XRP in the hands of SEC-related chatter. With the summer break nearly over, US lawmaker progress toward a crypto regulatory framework could significantly improve the mood.
SEC v Coinbase case-related news will move the dial. Investors await a Court ruling on the motion to dismiss the case. A Court ruling in favor to dismiss should drive demand for XRP and the broader market.
XRP Price Action
XRPUSD 310823 Weekly Chart
Resistance at $0.54 left XRP short of the $0.5750 – $0.5900 resistance band and the 50-day EMA. Profit taking after the Grayscale Court ruling was likely as investors await the Ripple opposition filing.
However, a convincing Ripple opposition filing would give the bulls a run at the $0.5750 – $0.5900 resistance band and the 50-day EMA.
Nonetheless, the threat of a successful SEC appeal will likely leave XRP exposed to more losses. A fall through the 200-day EMA would bring the $0.4920 – $0.4780 support band into play.
Considering the 37.80 14-Daily RSI reading, XRP has more room to fall before entering oversold territory.
XRPUSD 310823 Daily Chart
On Wednesday, XRP fell back through the 50-day EMA, a bearish signal. The Wednesday pullback left XRP short of the $0.5750 – $0.5900 resistance band and the 200-day EMA.
A move through the 50-day EMA would give the bulls a run at the $0.5750 – $0.5900 resistance band. However, XRP needs positive case news to deliver support.
A failure to move through the 50-day EMA would leave the $0.4920 – $0.4780 support band in play. A lack of Court activity remains a test for XRP investors.
However, considering the 14-4H RSI reading of 50.40, investors are on the fence ahead of the next Court filings.
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.