XRP price surges against Bitcoin (BTC) as optimism emerges about a possible settlement between San Francisco-based blockchain payments firm Ripple and the U.S. Securities and Exchange Commission (SEC). there is
Settlement potential emerges in Ripple lawsuit
On Sept. 23, the XRP/BTC pair surged from 0.00002132 to a 13-month high of 0.00002877, a 35% gain against Bitcoin in a single day. Meanwhile, XRP rose 42% against the US dollar over the same timeframe.
Significant price volatility in the XRP market began to emerge after Ripple and the SEC filed motions for summary judgment in court on Sept. 12 in a securities law violation trial against Ripple.
In other words, Ripple and the SEC have agreed to issue a verdict by December 2022 on the available evidence on whether Ripple illegally raised money by selling XRP.
The price of XRP has skyrocketed by about 75% and 60% against Bitcoin and the dollar respectively since this summary judgment motion was filed, and we are optimistic that the decision could be in Ripple’s favor. This is a factor.
Ripple CEO Brad Garlinghouse expressed a similar view in an interview with Fox Business on Sept. 22, further fueling the buying.
— HeadlineHunter!U.S. (@HHunter_US) September 22, 2022
“People are realizing that the SEC has gone too far and is too outspoken to follow the law.[…] The SEC seems to have lost its way.”
XRP sharks and whales
Since May, the price of XRP has also skyrocketed as wealthy investors have been hoarding XRP tokens consistently.
Santiment dataThe percentage of sharks with 1 million XRP and whales with 10 million XRP or more has increased from 5.43% on December 31, 2020 to 6.35% on September 23, 2022, according to the report.
“Active Shark & Whale addresses with $1M to $10M XRP have been in an accumulation pattern since late 2020.”
Meanwhile, entities with over 10 million XRP tokens accounted for an all-time low of 70.75% of the supply during this period.
Does pain come first?
Ahead of the Ripple vs. SEC ruling, traders seem to be buying on the rumors. However, XRP technicals suggest a possible adjustment, although it is unclear whether it will change to “sell on the news” depending on the outcome of the ruling.
Notably, XRP has already become an overbought asset against Bitcoin and the dollar.
The XRP/BTC Relative Strength Index (RSI) hit close to 85 on Sept. 23, well above the 70 “overbought” threshold typically seen before a strong price correction or consolidation.
XRP/BTC has already corrected nearly 10% from its 13-month peak, as shown in the chart below. The pair is currently testing 0.00002601 for short-term support and if it breaks below, it could test 0.00002079 as a key downside target or fall 20% from current levels later in the year.
Meanwhile, XRP is showing a similar sharp correction against the dollar after touching the resistance line of the downtrend line for several months as shown in the chart below.
If the pullback from trendline resistance persists, XRP may test the near-term horizontal trendline support as the next downside target. That means the XRP/USD pair could drop nearly 40% from today’s price to $0.31 by the end of 2022.
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