Will XRP Price Defend $0.5 Support If SEC Decides to Appeal?

Highlights

XRP price reversal from multi-year resistance hints at a 30% downside risk.
XRP Open Interest (OI)-Weighted Funding Rate at -0.0085, indicating that traders are paying to maintain short positions
Attorney Jeremy Hogan believes the injunction on ODL sales will not change much, noting that most sales are outside U.S. jurisdiction.

The XRP price dipped 2.62% to $0.56 on Sunday as crypto witnessed renewed selling pressure. The falling price marks a notable reversal within the multi-year triangle pattern, signaling the potential for a major correction. Will the bear’s plan intensify as some reports hint that the U.S. Securities and Exchange Commission (SEC) may decide to appeal certain aspects of the final verdict?

Ripple Faces Potential SEC Appeal Despite $12.5M Penalty

The XRP coin has recently garnered the attention of crypto investors following a favorable final verdict in the Ripple vs SEC case. On August 7th, Judge Torres imposed a $12.5 million penalty on Ripple, far less than the SEC’s original $2 billion demand.

While the XRP Community celebrated this as a major win, discussions emerged regarding the possibility of an appeal by the U.S. Securities and Exchange Commission (SEC), particularly concerning Ripple’s On-Demand Liquidity (ODL) sales.

However, Attorney Jeremy Hogan explains that the injunction on Ripple’s On-Demand Liquidity (ODL) sales will unlikely change the status quo. He highlights that most XRP and ODL sales are outside U.S. jurisdiction. Ripple can still sell XRP to institutions under specific exemptions, and the SEC must prove any violation to enforce the order.

I see lots of questions re what the injunction means for ODL sales. I don’t see it changing the status quo AT ALL, for the following reasons:

1. As Ripple has stated, the majority of its XRP and ODL sales are outside the U.S. jurisdiction and not subject to the ruling. Those… pic.twitter.com/3GimWEcp0c

— Jeremy Hogan (@attorneyjeremy1) August 7, 2024

Hogan also mentions that Ripple’s legal team has had ample time to adjust its practices to comply with the summary judgment ruling.

XRP Price Hints Major Reversal Within Triangle Pattern

The daily XRP price chart shows a notable reversal of $0.64 as the mid-week recovery subsides. The bearish turnaround plunged the asset 11.5% to $0.56, while the market cap plunged to $31.9 Billion.

Interestingly, this reversal marked another bear cycle within the triangle pattern, which had been intact since September 2021. This chart pattern consists of two converging trendlines: dynamic resistance and support, which drive the prices into a squeezing range before a major breakout.

Data from Coinglass shows that XRP’s Open Interest (OI)-Weighted Funding Rate is -0.0085. This negative rate shows that short sellers are paying to maintain their positions, implying expectations of further price declines.

XRP OI-Weighted Funding Rate | Coinglass

Thus, the recent reversal and anticipated appeal from the SEC on Ripple’s ODL sale could accelerate the bearish sentiment for XRP. With sustained selling, the altcoin could breach the combined support of $0.55 and the 200-day EMA, bolstering a downfall to the psychological level of $0.4.

The $0.4 level, backed by the triangle pattern support, is a major accumulation zone for dip buyers. A potential rebound from this bottom could renew the recovery momentum for the next leap.

Frequently Asked Questions (FAQs)

1. How could a potential SEC appeal impact XRP's price?

If the SEC decides to appeal aspects of the Ripple case, particularly concerning ODL sales, it could intensify bearish sentiment, putting additional downward pressure on XRP's price.

2. What is the current support level for XRP?

The XRP price will witness suitable support at $0.55, backed by 200-day EMA.

3. What the major trend in XRP?

The XRP price shows a long-term sideways trend amid the formation of a symmetrical triangle pattern.

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Sahil Mahadik

Sahil is a dedicated full-time trader with over three years of experience in the financial markets. Armed with a strong grasp of technical analysis, he keeps a vigilant eye on the daily price movements of top assets and indices. Drawn by his fascination with financial instruments, Sahil enthusiastically embraced the emerging realm of cryptocurrency, where he continues to explore opportunities driven by his passion for trading

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