27 September 2023
The cryptocurrency sector, particularly Ripple Labs, has been embroiled in a scenario of concern and uncertainty following a contentious exchange between the US Securities and Exchange Commission’s (SEC) chair, Gary Gensler, and the House Financial Services Committee in Congress which could affect the XRP price.
Despite Ripple’s partial legal victory against the SEC, Gensler’s stance remains unchanged, as he emphasized the regulatory body’s determination to pursue an interlocutory appeal in the ongoing case. This has raised further questions and apprehension within the industry.
Congressman Highlights Ripple Case’s Far-From-Over Status
During the hearing, Congressman Stephen F. Lynch expressed his concern about the potential pattern whereby court battles become the norm to determine the classification of individual tokens as securities.
While Gensler did not respond directly, he mentioned the SEC’s filing for an interlocutory appeal, highlighting the regulator’s intent to continue the legal battle. Lynch acknowledged that the case is far from over.
On August 17, Judge Torres granted the SEC’s request to file an interlocutory appeal, granting the regulatory body an opportunity to present a compelling case to the Second Circuit.
However, it’s important to note that this permission only allows the SEC to file the motion for an interlocutory appeal, presenting a significant opening for the regulator to challenge the previous ruling and seek a different outcome.
These recent developments, as highlighted by Congressman Lynch, indicate that the ongoing Ripple case may take considerable time to resolve.
As a result, XRP is likely to remain stagnant, trapped in a consolidation phase, or potentially retracing beyond its current levels. This could potentially push the cryptocurrency to pursue another annual low, extending beyond the $0.4225 mark reached on August 17.
XRP Price Analysis Points To Potential Macro Uptrend
Despite the legal battles and the uncertainty surrounding the current state of the crypto market, some signs might point to a different scenario, where XRP could follow a macro uptrend.
Technical analysis highlights a pattern resembling the last market cycle, which consists of five phases: rise, crash, retrace, reaccumulation, and eventual breakout.
Drawing parallels to previous cycles, many coins have experienced explosive growth beyond their previous all-time highs after the reaccumulation phase.
For instance, Bitcoin went through its reaccumulation phase during the COVID-19 pandemic. Still, due to the ongoing lawsuit, XRP has entered a more prolonged reaccumulation phase in the form of an Elliott wave triangle, similar to the previous cycle.
Currently, the market is in phase E, which suggests a potential retracement upwards, followed by another dip to lower levels. Eventually, there is anticipation for a breakout from this massive triangle, leading to a new all-time high likely to occur next year or the year after.
While some argue that the XRP price fate depends on Bitcoin’s performance, it is worth noting that when comparing XRP to BTC, it is also within an accumulation range and exhibits a bullish outlook. From this perspective, XRP is expected to outperform other alternative coins significantly.
However, for the XRP price to sustain an extended uptrend in the near term, it must overcome significant resistance levels that pose potential challenges. In the immediate time frame, XRP faces a resistance at $0.5132, followed by two additional formidable barriers, which are expected to be particularly challenging in the coming weeks.
XRP’s 50-day and 200-day Moving Averages (MAs) are currently positioned at $0.5194 and $0.5318, respectively. These MAs, once considered reliable support levels, have failed to hold, necessitating a significant catalyst for XRP to surpass them.
This is evident in the chart, depicting the partial victory on July 13, when XRP surged above both MAs. However, since August, XRP has been trading below them.
Featured image from Shutterstock, chart from TradingView.com