XRP’s Value Receives a Boost After Not Being Termed as Security
Following the long-standing legal tussle between Ripple, the parent company of XRP, and the U.S. Securities and Exchange Commission (SEC), XRP’s value received a significant boost. The virtuous gain was based on the ruling that the token is not a security. However, these gains have somewhat evaporated as the cryptocurrency was observed to have significant outflow of capital.
| Date | Market Capitalization | Event |
|---|---|---|
| July 14, 2023 | $42.89 Billion | Day after the SEC case ruling |
| August 19, 2023 | $24.66 Billion | More than a month after SEC Ruling |
What the case was about?
The regulatory body, SEC, accused Ripple of engaging in an unregistered securities offering through the sale of XRP tokens. However, going against the claims, the judge delivered a verdict that XRP did not meet the classification criteria for a security. This was a crucial point as it partially absolved Ripple from the SEC’s allegations.
Initial Investor Reaction and the Hype Fading
Such crucial news was always greeted with a joyous sentiment among investors. The aftermath of this ruling was a clear indication as XRP’s value surged to new heights, hitting above $0.80. This marked an astonishing 90% increase within a 24-hour window. However, much to the chagrin of investors, this surge was not long-standing.
The gradual decline in XRP’s market capitalization can be primarily attributed to certain factors:
- Profit-taking by traders who capitalized on the initial price upsurge
- Overall market volatility
- Ongoing uncertainty regarding the cryptocurrency’s regulatory status in the long term
During a market downturn, XRP experienced an outflow of approximately $4 billion within a single day. This coincided with a general selling trend in the market. However, it is noteworthy that despite the current market pessimism, XRP emerged as the most frequently traded altcoin in 2023.
Understanding the Importance of Continued Regulatory Uncertainty
The SEC has already expressed its intention to appeal against the case ruling. The regulatory body wants to challenge the determination that XRP isn’t a security. This regulatory whirlwind brings a sense of volatility to the XRP value. Nevertheless, some parties involved in the case believe that an appeal may not necessarily pose a setback for XRP.
An Analysis of XRP’s Price
During the time of publication, XRP was valued at $0.51 which exhibited weekly losses of nearly 20%.
XRP is currently struggling against a broader market correction and ongoing regulatory uncertainty. Yet, many analysts point out that this correction is anticipated, and that the asset must test new lows to rally.
Finbold’s report highlighted one such statement from a crypto analyst going by the pseudonym Juicyho. This analyst points out that the initial excitement around the SEC has waned, and hence, investors should monitor the support levels around $0.58.
Is XRP Poised for Bullish Sentiment?
Despite the uncertain market conditions, speculation suggests that XRP may be moving towards a bullish sentiment, given its positive trading patterns. A sheer example of this sentiment is the display of an extremely rare golden cross pattern by the token, marking as only the third time this bullish indicator has appeared.
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