Ripple (XRP) experienced a rollercoaster ride this week, surging to its highest weekly gain ever before tumbling under profit-taking pressure. According to data from Santiment, XRP holders cashed out over $111 million in profits between July 12th and 18th, 2024. This profit-taking spree coincided with a 7% drop in XRP’s value on Thursday, pushing the price down to $0.58, a level below the key psychological barrier of $0.60.
This recent price action comes after a period of optimism surrounding XRP. The native token of the XRPLederger enjoyed a significant rally, reaching a multi-month high of $0.6378 on July 17th. This surge was likely fueled by rumors of a potential settlement in the ongoing lawsuit between Ripple Labs and the U.S. Securities and Exchange Commission (SEC). The lawsuit, which centers around whether XRP is a security, has cast a long shadow over the cryptocurrency’s price performance.
Market sentiment around the lawsuit remains a key driver for XRP. Attorney Fred Rispoli’s prediction of a resolution by the end of July 2024 initially fueled the rally. However, the absence of any new filings or concrete evidence of a settlement has dampened that enthusiasm. Additionally, a former securities lawyer recently weighed in, arguing that Ripple likely violated securities laws. This lack of clarity regarding the lawsuit’s outcome continues to be a source of uncertainty for XRP investors.
On-chain data from Santiment further supports the narrative of profit-taking. The “Network Realized Profit/Loss” metric revealed positive spikes between July 12th and 18th, indicating that traders were cashing in on their gains during this timeframe. Additionally, the “Active Addresses” metric displayed a surge in activity during the same period, suggesting a correlation between this activity and the profit-taking behavior.
Despite the recent dip, technical indicators suggest there might still be some underlying bullish momentum for XRP. While the price erased over 7% in a single day, the Moving Average Convergence Divergence (MACD) indicator continues to signal positive strength. From a technical analysis perspective, XRP could potentially extend its gains and revisit the $0.66 level, representing a 14.42% increase. This price target aligns with the 78.6% Fibonacci retracement level of the decline between March’s high of $0.74 and July’s low of $0.38.
However, a break below the $0.56 support level, which coincides with the 50% Fibonacci retracement, could negate the bullish thesis and lead to a further drop towards the $0.52 support zone.
In conclusion, XRP’s price action this week highlights the interplay between profit-taking behavior and ongoing uncertainty surrounding the SEC lawsuit. While technical indicators offer a glimmer of hope, the lack of a clear resolution in the legal battle remains a significant hurdle for XRP’s sustained growth.
