XRP Price Continues to Drop as Traders Abandon Altcoins Due to Losses

• XRP traders have recorded $25.67 million in losses since Tuesday.
• The price of XRP fell to a two-week low of $0.56 on Wednesday.
• Ripple is expected to file its response to the SEC’s brief on appeals by April 22.

Ripple (XRP) price fell to $0.56 on Wednesday, its lowest level in two weeks, as traders awaited further developments in the Securities and Exchange Commission’s (SEC) lawsuit against Ripple. The next key deadline in the legal battle is April 22, when Ripple is expected to file its response to the SEC’s brief on appeals.

Meanwhile, the recent drop in XRP price has resulted in traders losing over $25 million in the past two days.

Daily Market Roundup: XRP Traders Dump Losing Holdings Ahead of Looming Lawsuit Deadline

• Ripple Holders realized $25.67 million in losses on their XRP assets since Tuesday, as shown on the network’s profit/loss chart on Santiment.
• This metric measures the overall profit or loss made by traders who sold their assets on a given day. If traders realize losses in parallel with a price decline, this is considered a sign of capitulation.

Profit/loss made by the network.

• Ripple traders are dumping their XRP holdings, likely due to the asset’s falling price and uncertainty surrounding the altcoin’s security status.
• Ripple’s Chief Legal Officer Stuart Alderoty commented on the SEC’s stance on XRP’s security status and the regulator’s varying definitions of what constitutes a crypto ecosystem, in his recent tweet.
• Alderoty addresses community concerns about XRP’s status as a “non-security” and fears that the SEC could overturn Judge Analisa Torres’ XRP ruling.

• XRP holders are paying attention to the next key deadline in the Ripple lawsuit on April 22, when Ripple is expected to file its opposition to the SEC’s brief on appeals.

Technical Analysis: XRP Price Could Hit $0.56 and Start Recovering

XRP price has formed three consecutive tops and bottoms in April, as shown on the XRP/USDT 4-hour chart. The altcoin’s descent will likely lead to a surge in liquidity at the $0.5673 support level, the March 20 low and a key level on the 4-hour chart. Further down, a key support level on the daily chart chart is $0.5386, the low of February 22.

XRP price has been holding above both key supports for almost a month now.

If XRP price gathers liquidity at the $0.5673 support level, the altcoin should bounce back and fill the fair value gap (FVG) formed between $0.6030 and $0.6103 (4-hour time frame). There is another FVG that could likely be filled, between the $0.6185 and $0.6204 levels on the daily time frame.

The Relative Strength Index (RSI) stands at 36.19, close to the oversold zone at 30 and below.

XRP/USDT 4-Hour Chart

A 4 hour course candlestick A close above the psychologically important $0.60 level could invalidate the thesis of an initial decline in XRP. The altcoin could rally against the FVG and fill inefficiencies on the 4-hour and daily time frames. XRP price could face resistance at $0.6147, the 50% Fibonacci marker of the climb from its January 31 low of $0.4853 to the March 11 high of $0.7440.

SEC vs Ripple Lawsuit FAQ

It depends on the transaction, according to a court ruling issued on July 14: For institutional investors or over-the-counter sales, XRP is a security. For retail investors who bought the token through programmatic sales on exchanges, on-demand liquidity services, and other platforms, XRP is not a security.

The U.S. Securities & Exchange Commission (SEC) has charged Ripple and its executives with raising more than $1.3 billion through an unregistered offering of the XRP token. While the judge ruled that programmatic sales are not considered securities, sales of XRP tokens to institutional investors are indeed investment contracts. In this latest case, Ripple violated U.S. securities law and will have to continue to litigate for the approximately $729 million it received under written contracts.

The ruling delivers a partial victory for both Ripple and the SEC, depending on how you look at it. Ripple gets a big win on the fact that programmatic sales aren’t considered securities, and that could bode well for the broader crypto industry, as most of the assets targeted by the SEC’s crackdown are managed by decentralized entities that sold their tokens primarily to retail investors through exchanges, experts say. Still, the ruling doesn’t do much to answer the key question of what makes a digital asset a security, so it’s not yet clear whether this lawsuit will set a precedent for other open cases that affect dozens of digital assets. Issues like how decentralized is appropriate to avoid the “security” label or where to draw the line between institutional and programmatic sales are likely to linger.

The SEC has stepped up its crackdown on the blockchain and digital asset industry, filing charges against platforms such as Coinbase and Binance for alleged violations of U.S. securities law. The SEC argues that the majority of crypto assets are securities and are therefore subject to strict regulation. While the defendants can use parts of the Ripple ruling to their advantage, the SEC may also find reasons to maintain its current strategy of regulation through enforcement.

The court’s decision is a partial summary judgment. The decision can be appealed once a final judgment is issued or if the judge allows it beforehand. The case is in the pretrial phase, during which Ripple and the SEC still have the opportunity to reach an agreement.

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