XRP, Ripple’s native cryptocurrency, has been under significant pressure following recent developments in the ongoing legal battle with the U.S. Securities and Exchange Commission (SEC). On October 3, XRP experienced a 3.08% decline, adding to the previous day’s 9.78% drop, closing at $0.5222. The legal uncertainty surrounding Ripple has fueled investor concerns, leading to speculation that XRP could soon dip below the $0.50 mark. This article examines the latest in Ripple’s legal saga and how it might impact XRP’s price trends.
The SEC’s Appeal: What’s at Stake for Ripple?
The SEC filed a Notice of Appeal on October 2, signaling its intention to challenge key rulings in its case against Ripple. This case has garnered attention across the cryptocurrency industry due to its potential to set legal precedents for how digital assets are classified and regulated in the United States.
Two primary issues are at the center of the SEC’s appeal:
- Disgorgement Ruling – In the final judgment, Judge Analisa Torres granted the SEC a civil monetary penalty of $125 million but denied its request for $1.1 billion in disgorgement. This decision was a major blow to the SEC, and its appeal is aimed at reversing this ruling.
- Programmatic Sales of XRP – Perhaps the most contentious ruling was Judge Torres’ decision in July 2023, where she ruled that Ripple’s programmatic sales of XRP did not meet the criteria of the Howey Test, which determines whether a financial transaction qualifies as an investment contract. The SEC’s appeal of this ruling could have far-reaching consequences for Ripple and other cryptocurrency platforms.
Legal experts are closely watching the SEC’s appeal process. Former SEC attorney James Murphy (also known as “MetaLawMan”) believes that the SEC will likely focus on these two rulings, which could shape the regulatory landscape for other major cryptocurrency cases, including those involving Coinbase, Binance, and Kraken.
Ripple’s Response: A Cross-Appeal Looming?
In response to the SEC’s appeal, Ripple has the option to file a cross-appeal. Prominent figures in the crypto legal community expect Ripple to take this step, which would allow the company to challenge additional aspects of the case that could be in its favor. Bill Morgan, a pro-crypto attorney, and Marc Fagel, a former SEC lawyer, both see little downside for Ripple in filing a cross-appeal.
As journalist Eleanor Terrett from Fox Business noted, the SEC has yet to file its Form C, which will clarify the specific rulings being appealed. Ripple has 14 days from the filing date to respond with its cross-appeal, which could further extend the legal uncertainty.
Potential Impacts on XRP Price: What to Expect
XRP’s price action is closely tied to developments in the legal battle with the SEC. The recent declines in XRP’s value reflect market anxiety over the SEC’s appeal. If the SEC successfully challenges the Programmatic Sales ruling, XRP could face significant selling pressure, with analysts projecting a potential drop to $0.40.
On the technical side, XRP is displaying bearish signals on its weekly and daily charts. The token remains below both the 50-day and 200-day exponential moving averages (EMAs), reinforcing a negative outlook. For XRP bulls to regain control, the price would need to break through $0.55 and surpass the 200-day EMA, which would then target the next resistance level at $0.5739.
However, should XRP fall below its recent low of $0.5075, it could break past the key psychological support level of $0.50. With the Relative Strength Index (RSI) reading at 36.16, XRP may enter oversold territory, increasing the likelihood of a drop below $0.50 before potentially finding support.
Broader Implications for the Crypto Market
Ripple’s legal battle with the SEC is not just about XRP; it could have broader implications for the entire cryptocurrency market. A successful appeal by the SEC could create a more challenging regulatory environment for other cryptocurrencies, particularly those involved in similar legal disputes.
This is particularly relevant as other crypto exchanges like Coinbase, Binance, and Kraken are also navigating regulatory scrutiny. A ruling in favor of the SEC could embolden regulators to take a firmer stance on the classification of digital assets, making it harder for projects to operate within the U.S.
At the same time, Ripple has the potential to emerge as a major victor if it successfully counters the SEC’s claims. This could bolster the status of XRP and other cryptocurrencies in terms of regulatory clarity and market legitimacy.
What’s Next for Ripple and XRP Investors?
Investors and market participants should keep a close eye on the SEC’s next move, particularly its Form C filing, which will detail the specific rulings it plans to challenge. Ripple’s cross-appeal, if filed, will also be pivotal in determining the course of the legal proceedings.
As the case progresses, XRP’s price will likely remain volatile, with legal news being the primary driver of market sentiment. While the outlook appears bearish for now, the long-term future of XRP hinges on the outcome of these critical legal battles.
Conclusion: Uncertain Times Ahead for Ripple and XRP
The SEC’s appeal in the Ripple case has cast a shadow of uncertainty over XRP’s future, pushing the cryptocurrency closer to the $0.50 mark. Legal experts suggest that the SEC’s challenge to the Programmatic Sales ruling could have far-reaching implications, not just for Ripple, but for the entire crypto market.
While investors may hope for a recovery, XRP’s price action will likely depend on the outcomes of the legal battles ahead. For now, the bearish sentiment dominates, and the potential for a drop below $0.50 remains high unless Ripple can gain some favorable rulings in its defense. As always, investors should remain cautious and closely monitor the latest legal developments.