The value of XRP received a significant boost following the ruling that the token is not a security in the long-standing legal battle between parent company Ripple and the U.S. Securities and Exchange Commission (SEC). However, these gains have since dissipated as the cryptocurrency experienced a notable outflow of capital.
As of August 19, XRP held a market capitalization of $24.66 billion, reflecting an outflow of $18.23 billion from the $42.89 billion recorded on July 14, a day after the SEC case ruling.
In the case, the regulatory body accused Ripple of engaging in an unregistered securities offering through the sale of XRP tokens. The presiding judge delivered a verdict stating that XRP did not meet the criteria for classification as a security. This effectively absolved Ripple from the SEC’s allegations, albeit on a partial basis.
SEC hype fades
Initially, investors reacted to this news with enthusiasm, propelling XRP’s value to new heights, surging to a multi-month high above $0.80, marking an astonishing 90% increase within a 24-hour span. However, this surge proved to be short-lived.
The decline in XRP’s market capitalization can be attributed to a combination of factors, including profit-taking by traders who capitalized on the initial price surge, overall market volatility, and ongoing uncertainty regarding the cryptocurrency’s regulatory status in the long term.
During a recent market downturn, XRP experienced an outflow of approximately $4 billion within a single day, coinciding with a general sell-off. Interestingly, despite the prevailing market pessimism, XRP emerged as the most frequently traded altcoin in 2023.
At the same time, the SEC has expressed its intention to appeal the case ruling. The regulatory body has sought permission to challenge the determination that XRP is not a security. In light of this continued regulatory uncertainty, speculation persists that the value of XRP will remain volatile. However, some parties involved in the case believe that an appeal may not necessarily pose a setback for XRP.
XRP price analysis
By the time of publication, XRP was valued at $0.51, experiencing weekly losses of nearly 20%.
Meanwhile, XRP is encountering the challenge of navigating the broader market correction and ongoing regulatory uncertainty. Noteworthy, analysts have maintained that the correction is anticipated, indicating that it must test new lows for the asset to rally.
As highlighted by Finbold’s report, a crypto analyst using the pseudonym Juicyho pointed out that the initial excitement around the SEC has waned, and investors should monitor support levels around $0.58.
Significantly, speculation persists that XRP is poised for bullish sentiment, given its positive trading patterns. In this context, the token has exhibited an exceptionally rare golden cross pattern for only the third time, a bullish indicator.
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