XRP, the native token of Ripple Labs, has surged in recent days, reclaiming a three-month high of $0.61. This price jump is largely attributed to speculation surrounding a potential settlement in the ongoing legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC).
The rumor mill went into overdrive after news emerged of a scheduled closed-door meeting between the SEC and Ripple on July 18th, 2024. Market observers interpreted this as a sign of progress towards a resolution in the long-running case. Some analysts even predicted a definitive outcome on that very date.
However, a dose of reality was injected by Marc Fagel, a former SEC lawyer. He pointed out that the two parties have held numerous similar meetings throughout the lawsuit, none of which resulted in a settlement. This suggests that the July 18th meeting might not be the silver bullet some investors are hoping for.
Despite the tempered expectations, the market has undeniably reacted positively. The XRP pump represents a 7% daily gain, effectively reversing all losses incurred during the second quarter. On a monthly basis, XRP has outperformed the broader market, boasting a 30% rise compared to Bitcoin’s meager 3% gain in the first half of July.
Technically, XRP faces a crucial resistance point at the 38.6% Fibonacci retracement level ($0.61). A decisive break above this level could see XRP target the next bullish zone at the 23.6% Fib ($0.66), translating to a further 7% increase.
However, caution is warranted. The current price sits right within a bearish order block, and the Relative Strength Index (RSI) indicates overheated conditions. This suggests strong buying pressure, but also the possibility of buyer exhaustion setting in. A retracement to the 50% Fib level could present a re-entry opportunity for sidelined investors.
Looking beyond the technical analysis, the overall spot market, particularly on exchanges like Binance, shows a significant drop in selling pressure. This is evident from the declining Exchange Inflow metric, which has plummeted from $739 million on July 10th to a mere $1.9 million at the time of writing.
Furthermore, XRP futures data reveals a rise in long positions from 47% to 49% since Monday, indicating increased bullish sentiment among traders.
The ultimate question remains: will the rally hold? The answer likely hinges on the outcome of the July 18th SEC-Ripple meeting. A positive development could propel XRP further, while a lack of progress might trigger a correction.
It’s important for investors to stay informed about the lawsuit’s developments and exercise caution while trading XRP. The market remains volatile, and the future trajectory of the token depends heavily on the regulatory landscape surrounding cryptocurrencies.
