- XRP gains 32% after the tariff-triggered crash to $1.6142, trading above $2.1000 on Tuesday.
- The SEC could vote to dismiss the case against Ripple after Paul Atkins officially assumes his role as agency Chair.
- Multiple XRP ETF applications’ deadlines loom, with all eyes set on incoming chair Paul Atkins.
- A drop in the derivatives’ open interest suggests traders are treading cautiously amid an uncertain macroeconomic environment.
Ripple (XRP) flaunted a bullish outlook, trading at $2.1505 at the time of writing on Tuesday. Investor risk appetite has continued to grow since the middle of last week, propping XRP for a sustainable upward move, eyeing $3.0000 psychological level. Sentiment around XRP leans bullishly, especially with the community waiting on the Securities and Exchange Commission (SEC) to officially vote to dismiss the lawsuit against Ripple.
XRP bulls hold steady amid speculation over the SEC vote
The XRP community eagerly awaits the Securities and Exchange Commission (SEC) vote to dismiss the case against Ripple. In a recent comment, Ripple CEO Brad Garlinghouse said that the company had reached an agreement with the agency’s staff. He added that protocol demands that the staff make recommendations to the commission, which is expected to vote on the matter.
The Senate confirmed President Trump’s nominee, Paul Atkins, as SEC Chair on April 9, potentially setting the groundwork for a crypto-friendly regulatory environment in the US.
At the same time, the SEC and Ripple jointly filed a request to suspend an imminent appeal in the lawsuit on Thursday. In other words, Ripple is unlikely to file a brief related to the appeal this Wednesday.
Experts and crypto lawyers weighing in on the matter said that the SEC could delay the vote to dismiss the case until Atkins assumes his role as SEC Chair. According to CryptoAmerica host Eleanor Terrett, the new chair could be sworn in over the next few days.
“Paul Atkins hasn’t taken his seat at the SEC yet. There are a few procedural steps before he can officially start, including President Trump signing off on his appointment and the formal swearing in. This could happen any time over the next few days,” Terrett explained.
XRP ETF deadlines loom
The incoming SEC Chair could have his plate full upon his accession to office, with pressing deadlines demanding his attention. Multiple asset managers have filed crypto-related ETFs, including XRP.
Crypto ETF applications | Source: Kaiko Research
According to Kaiko Research, the SEC confirmed XRP ETF applications in February and set the initial deadline as May 22.
“May 22 is an important date to watch in light of the recent ETF approval of a 2x XRP ETF from Teucrium, as the SEC must respond to Grayscale’s XRP spot filing by then.”
Can XRP rally to $3?
At the time of writing, XRP price firmly held onto support above the 200-day Exponential Moving Average (EMA), assuring traders of improving sentiment for both macro factors and fundamentals.
The Relative Strength Index (RSI) indicator’s breach of the descending trendline reinforces the bullish grip. As the RSI moves higher above the midline at 50, more traders will likely consider exposure to XRP. Besides, a buy signal from the Moving Average Convergence Divergence (MACD) indicator aligns with the bullish outlook.
XRP is required to break the confluence resistance at $2.2390 formed by the 50-day EMA and the 200-day EMA. This could make the token more attractive to investors, providing bullish momentum to breach previously tested resistance at $2.5000 and subsequently boost XRP toward its psychological resistance at $3.0000.
XRP daily chart
Despite the bullish spot market, Coinglass data highlights a worrisome situation: the derivatives’ open interest dropped by 6.45% to $3.1 billion in the last 24 hours. A negative long-to-short ratio of 0.9681 implies traders are leaning bearish in the short term. This could explain higher long position liquidations at $2.65 million compared to short position liquidations at $1.29 million.
XRP derivatives data | Source| Coinglass
Therefore, traders must tread carefully and be aware of all possible outcomes. Trade war tensions have cooled, but global markets are not out of the woods yet, especially with President Trump consistently assuring the world that no country is off the hook from his tariffs. A 90-day tariff pause is underway, with negotiations expected to take place, allowing countries to strike deals with the US.
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.
