- XRP reclaims the crucial $2 level as President Trump makes a classic U-turn on reciprocal tariffs.
- Massive liquidations hit short-position traders as cryptocurrencies rebounded on Thursday.
- A spike in open interest per Coinglass data signals heightened activity and growing bullish sentiment.
Ripple (XRP) seeks support above $2.0020 on Thursday after gaining 14% in the past 24 hours. The token trades at $2.0007 at the time of writing, reflecting growing bullish sentiment across global markets. Traders responded positively to United States (US) President Donald Trump’s U-turn on reciprocal tariffs on Wednesday, triggering bullish momentum across the market.
XRP recovery liquidates short traders
XRP price rebound from the Monday low signifies the resilience of the crypto market, considering over $1 billion was wiped off the market in liquidations at the start of the week. Trump’s incessant push for reciprocal tariffs had squeezed market liquidity, leaving most investors paralyzed.
However, the President made a stunning U-turn on Wednesday, less than 24 hours after the announced tariffs kicked in, extending relief to dozens of countries and handing global markets a new lifeline, as reported by FXStreet. The relief traversed Asian markets on Thursday, including Chinese stocks, despite Trump escalating the tariff war with China.
Cryptocurrencies generally recovered in the late American session on Wednesday and into the Asian session on Thursday. Bitcoin hit a daily high of $83,541 before correcting to $82,433 at the time of writing.
Altcoins, led by the most prominent smart contracts token, Ethereum (ETH), responded positively to the new lifeline, which has been increasing from the persistent dips since April 2. Ether has gained 13.7% to hover at $1,613, while BNB soars to trade at $574 in the late Asian session.
According to Coinglass data, the international money transfer token has posted an impressive 6.68% increase in derivatives open interest (OI) to $3.05 billion. Meanwhile, the XRP options volume rallied 21.36% to $7,670.
Following the massive liquidations on Monday, which battered long-position traders the most, President Trump’s tariff U-turn caught short-position traders by surprise, liquidating $18 million. $24.16 million has been liquidated in the last 24 hours, implying that $6.16 million in long positions had been forcefully closed.
XRP derivatives analysis data | Source: Coinglass
A spike in OI implies that the number of outstanding contracts or options is increasing, which translates to a spike in the inflow of money. It signals heightened activity and a growing bullish sentiment. Therefore, if this trend continues in the next few days, XRP may gain momentum above $2.0000 and increase the chances of a breakout to the next key resistance at $2.5000.
XRP about to flash a buy signal
The recovery from the Monday low of $1.6128 to highs above $2.0000 in the last 24 hours makes XRP attractive to long traders, especially with the Moving Average Convergence Divergence (MACD) indicator’s likelihood of sending a buy signal. However, a daily close above $2.0000 will protect these gains and possibly encourage traders to seek more exposure to XRP. Traders may want to watch out for the MACD line (blue) crossing above the signal line (red) to validate the uptrend.
XRP/USD daily price chart
The 200-day Exponential Moving Average (EMA) is slightly below the $2.0000 level at $1.9485. Holding above this second immediate support would further affirm the bullish grip.
Still, the ever-looming macroeconomic risk tied to President Trump’s unpredictable tariff policy remains a concern. It’s shifting constantly, leaving traders on edge and pushing them to make smarter moves—like using dollar-cost averaging or other risk management tools to safeguard their capital.
Declines below the support shown in green may open the door to losses targeting the dotted lines around $0.4500, an area last tested in November 2024.
SEC vs Ripple lawsuit FAQs
It depends on the transaction, according to a court ruling released on July 14, 2023:
For institutional investors or over-the-counter sales, XRP is a security.
For retail investors who bought the token via programmatic sales on exchanges, on-demand liquidity services and other platforms, XRP is not a security.
The United States Securities & Exchange Commission (SEC) accused Ripple and its executives of raising more than $1.3 billion through an unregistered asset offering of the XRP token.
While the judge ruled that programmatic sales aren’t considered securities, sales of XRP tokens to institutional investors are indeed investment contracts. In this last case, Ripple did breach the US securities law and had to pay a $125 million civil fine.
The ruling offers a partial win for both Ripple and the SEC, depending on what one looks at.
Ripple gets a big win over the fact that programmatic sales aren’t considered securities, and this could bode well for the broader crypto sector as most of the assets eyed by the SEC’s crackdown are handled by decentralized entities that sold their tokens mostly to retail investors via exchange platforms, experts say.
Still, the ruling doesn’t help much to answer the key question of what makes a digital asset a security, so it isn’t clear yet if this lawsuit will set precedent for other open cases that affect dozens of digital assets. Topics such as which is the right degree of decentralization to avoid the “security” label or where to draw the line between institutional and programmatic sales persist.
The SEC has stepped up its enforcement actions toward the blockchain and digital assets industry, filing charges against platforms such as Coinbase or Binance for allegedly violating the US Securities law. The SEC claims that the majority of crypto assets are securities and thus subject to strict regulation.
While defendants can use parts of Ripple’s ruling in their favor, the SEC can also find reasons in it to keep its current strategy of regulation by enforcement.
