Key Insights:
- XRP slid by 4.49% on Tuesday, ending the session at $0.5111.
- XRP tracked the broader market into negative territory, though uncertainty about the SEC v Ripple case contributed to heavier losses.
- On Wednesday, SEC v Ripple and Coinbase court rulings and SEC activity warrant investor attention.
The Tuesday Overview
On Tuesday, XRP slid by 4.49%. Reversing a 2.10% gain from Monday, XRP ended the session at $0.5111.
SEC v Ripple: Investors Anxious Ahead of Court Ruling
There was no SEC v Ripple case-related news on Tuesday. Investors await a court ruling on the SEC Motion to Compel. The SEC requested the court to order Ripple to provide 2022/23 financial statements and post-complaint contracts governing XRP sales to institutional investors.
The SEC filed the Motion to Compel as the deadline for remedies-related discovery approaches. Ripple and the SEC must conclude remedies-related discovery by February 12.
The SEC v Ripple case is in its final stages, with the respective parties preparing arguments for and against a punitive penalty. In July 2023, Judge Analisa Torres ruled Ripple breached Section 5 of the 1933 Securities Act for selling XRP to institutional investors.
If Judge Torres grants the Motion to Compel, post-complaint breaches of securities laws could result in a more substantial penalty.
The size of the penalty will likely impact XRP. However, SEC plans to appeal the Programmatic Sales of XRP ruling remains the focal point.
While investors await the court ruling on the Motion to Compel, the SEC drew unwanted attention.
Ripple Price Forecast
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See all Ripple forecastsWithin the Motion to Dismiss, the SEC stated,
“While the Commission recognizes that its attorneys should have been more forthcoming with the Court, sanctions are not appropriate or necessary to address those issues.”
Amicus Curiae attorney John E Deaton responded to a post on X (formerly Twitter) from Coinbase (COIN) Chief Legal Officer Paul Grewal about the SEC motion, saying,
“I’ve never seen an agency more in need of real leadership.”
It remains unclear whether the court deems more action necessary. While the SEC filing does not directly impact the SEC v Ripple case, it was another loss for the SEC. The court view on SEC lawyers could also increase the scrutiny of SEC legal arguments in other cases.
XRP Price Action
Daily Chart
XRP sat below the 50-day and 200-day EMAs, sending bearish price signals. Significantly, the 50-day EMA converged on the 200-day EMA. A bearish cross would confirm the bearish price trends.
An XRP return to the $0.52 handle would support a move to the $0.5470 resistance level.
SEC activity, SEC v Ripple, and SEC v Coinbase case-related updates need consideration.
However, a fall through the $0.5042 support level would give the bears a run at the $0.4700 support level.
The 14-day RSI reading, 34.44, suggests an XRP drop below the $0.5042 support level before entering oversold territory.
4-Hourly Chart
On the 4-hourly, XRP sat below the 50-day and 200-day EMA. The EMAs reaffirmed the bearish price signals.
An XRP return to the $0.52 handle would support a move toward the 50-day EMA and the $0.5470 resistance level.
However, a fall through the $0.5042 support level would give the bears a run at the $0.4700 support level.
The 4-hourly RSI, with a reading of 31.16, shows XRP on the border with oversold territory. Buying pressure could intensify at the $0.5042 support level.
