Ripple (XRP) is experiencing minor losses on Friday as holders consider the potential implications of a likely appeal by the US Securities and Exchange Commission (SEC) in the ongoing lawsuit.
Although the final ruling in the SEC vs. Ripple case was seen as a partial victory for both sides, Fox Business journalist Eleanor Terret reported on X that the regulator is expected to appeal, citing a former SEC lawyer. An appeal could affect XRP's price by raising questions about its legal status as a non-security in transactions on cryptocurrency exchange platforms.
Daily Digest Market Movers: XRP Legal Clarity at Risk
- A former SEC lawyer informed Fox Business journalist Eleanor Terret that the SEC is "likely" to appeal the ruling in the lawsuit, sparking concerns among XRP traders.
- The SEC vs. Ripple lawsuit concluded on a relatively positive note for both parties. While the regulator secured a penalty significantly higher than what Ripple proposed ($125 million vs. $10 million), Ripple was able to continue its business and gained legal clarity regarding XRP’s status as a non-security when sold through exchanges.
- In July 2023, Judge Analisa Torres ruled that XRP is not a security in transactions on cryptocurrency exchanges. However, if the SEC decides to appeal, it could undermine the legal clarity of XRP’s status and require the judge to reapply the Howey Test to determine if it meets the criteria for being classified as a security, according to pro-crypto attorney John Deaton on X.
- Deaton argues that pursuing an appeal would be “a total waste of taxpayer money,” as XRP does not meet the requirements of the Howey Test, particularly the “common enterprise” factor. He believes it is unlikely that an SEC appeal would alter the initial ruling. Nonetheless, the uncertainty surrounding the appeal process could affect the sentiments of XRP traders as they consider potential outcomes.
Technical Analysis: XRP May Target Liquidity at $0.5581
XRP is currently in a multi-month downward trend, although it has been trading sideways in recent days, managing to stay above the key support level at $0.5800.
The Moving Average Convergence Divergence (MACD) indicator suggests underlying positive momentum in XRP’s price trend. However, the green histogram bars are decreasing in size, indicating that this momentum may be waning. A potential cross of the MACD line below the signal line could signal a bearish shift that traders should monitor.
If a downturn occurs, XRP may target liquidity at $0.5581, a significant support level that held throughout September. Should this level fail to hold, the next support zone appears in the Fair Value Gap (FVG) between $0.5413 and $0.5556.
Conversely, if XRP rallies, it could aim for the $0.6200 level, which represents the upper boundary of an FVG and a key resistance point for the altcoin, once it sweeps liquidity in the imbalance zone.
