XRP gains almost 75% in 7 days. What’s going on?!

XRP gains almost 75% in 7 days. What's going on!

The SEC vs. Ripple case is gaining momentum. Along with it comes the increasing price volatility of the XRP token. As a possible result XRP gains almost 75% in just 7 days. Let’s find out what exactly is the cause!

Let’s start from the beginning

December 2020, the price of XRP balances mainly in the range of $0.50-$0.65. Suddenly a SEC lawsuit against Ripple, the issuer of XRP, comes to light. The case sounds very serious – the company’s proprietary token, according to the SEC, can be considered a security under American law. Fear appears on the market, and the price reacts sharply, recording a descent to levels as low as USD 0.17. In order not to offend the market regulators, the exchanges in the United States decide to suspend XRP trading. 

A few months of sideways movement in the value of the token begins. In turn, rumors contribute to occasional price bumps. The strongest of these occur in early April when, based on the alleged relisting of XRP on Coinbase, the token soars to a price of over $1.96, an increase of over 200% in just 9 days. When the insinuations turn out to be false and the entire cryptocurrency market is in crisis, the price of XRP returns to levels like a boomerang, in the $0.50-0.65 range.

History repeats itself

This time is no different. Another positive news in the SEC skirmish with Ripple, causes another XRP price bump. This time, Judge Sarah Netburn granted Ripple CEO Brad Garlighouse’s request to gain access to trading records from the platform. This is important because cryptocurrency exchanges like Binance allow people from all over the world to buy and sell virtual coins. In this case, showing that Brad Garlighouse and Ripple sold tokens to people outside the United States has the power to significantly weaken the SEC’s rhetoric pointing to the XRP token as a security. A while back, the Japanese regulator spoke out on this issue, making it clear that XRP has nothing to do with a Security. Importantly, no other country has so far expressed doubts related to those of the United States. Other exchanges outside the U.S. region, such as Bitstamp, Huobi and Upbit, were asked for similar documents back in June. Documentation from them could be key here. This is a strong card in the ongoing proceedings, which is immediately reflected in the price of the asset.

The situation on the XRP chart

After the positive decision of the judge, XRP reacted significantly. The price of the token at a key phase increased in value by almost 75% in just 7 days, thus breaking out of the space of all key moving averages on the daily chart. Nevertheless, it should be remembered that in the event of possible negative news from the proceedings, these averages only sporadically provided support for XRP.

Therefore, for XRP, whose price action is largely based on speculation and rumors, it is rather worth looking at key support and resistance levels. One resistance that appears on the horizon is the $1.96 level, set on April 14, 2021, and behind it is the so-called “empty space” that could push the value of XRP even to the regions of the previous ATH, located around $3.31.

On the other hand, should we witness further negative news, the $0.65 level will be a key support. Just after it we have USD 0.5, where we have recently observed a double bottom (marked in yellow). In turn, a breakout of these areas may condemn XRP to a decline to the neighborhood of $0.35-0.40 and the critical support at $0.20.

If the situation favors Ripple and the court case, in turn, heads towards the end, we can expect very sharp movements on the coin. Already rumor-driven XRP is becoming hard to miss. It will be interesting to see what the facts may cause.

Łukasz

Łukasz

Market Analyst

Disclaimer: Blockbulletin does not take accountability of investments based on the information of the website. We highly advice readers to make extensive research prior to any invest

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