On May 16, XRP dropped to $2.35, following a ruling by Judge Analisa Torres that rejected a joint motion from Ripple and the SEC for an indicative ruling. The setback raised concerns that the legal battle could drag on, dampening market sentiment and causing a bearish turn for XRP.
Key Support Levels Tested
XRP is currently testing a crucial trendline support at $2.40, a level that could determine the token’s next move. If the price fails to hold this support, technical analysts warn of a potential pullback to the next support zone between $2.19 and $1.79. XRP had already faced rejection at the $2.60 mark earlier in the week, and the latest court ruling exacerbated the downtrend.
Crypto trader “Man of Bitcoin” noted that a breach below this trendline could signal further declines, impacting both short-term and long-term price action. As a result, traders are watching the $2.40 level closely for signs of further bearish momentum.
Impact on Market Sentiment and Open Interest
The broader market sentiment for XRP turned bearish, as the court’s decision to deny the joint motion raised doubts about a potential settlement in the lawsuit. Additionally, XRP’s open interest dropped by 6% to $5.08 billion, indicating reduced market participation. Over $22 million in liquidations were recorded in the 24-hour period, with the majority of them in long positions, reflecting growing caution among investors.
Ripple’s Response and Legal Developments
Despite the setback, Ripple’s Chief Legal Officer, Stuart Alderoty, reassured that Ripple and the SEC would work collaboratively to address the judge’s concerns. Meanwhile, pro-XRP lawyer Bill Morgan highlighted a potential resolution through a limited remand, though no official decision has been made yet.
Judge Torres emphasized that both parties must meet procedural requirements to modify her previous ruling. The court also noted that Ripple’s efforts to modify the final decision on penalties were “improperly” filed, further complicating the potential for a quick resolution.
What’s Next for XRP?
Legal experts, including crypto lawyer John Deaton, pointed out that from Judge Torres’s perspective, the SEC’s prolonged legal efforts against Ripple cannot be easily dismissed. The court’s latest decision indicates that any modification to the ruling would require substantial justification, both legally and in terms of public and institutional interests.
As Ripple and the SEC continue to navigate this complex legal landscape, the price of XRP may remain under pressure, with potential rallies stalled until more clarity emerges from the court proceedings. Investors will be closely monitoring the situation, as any significant developments in the lawsuit could prompt a shift in market dynamics.
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