In the ever-evolving landscape of cryptocurrency regulations, the ongoing legal battles involving the U.S. Securities and Exchange Commission (SEC) and prominent players in the crypto space are taking center stage. Notably, the SEC’s case against Ripple (XRP) has reached a crucial stage, with recent developments shedding light on potential market impacts.
XRP’s Monday Performance and Legal Landscape
On Monday, XRP experienced a marginal decline of 0.12%, partially offsetting a 0.28% gain from the previous day, closing the session at $0.5754. Interestingly, there was a lack of SEC v Ripple case-related news influencing XRP price trends on this particular day.
The focus, instead, remains on the ongoing legal proceedings between the SEC and Ripple, specifically in the context of remedies-related discovery. This phase, which marks the final stage in determining penalties related to XRP sales to U.S. institutional investors, demands Ripple to furnish the SEC with financial statements for 2022-2023 and post-complaint contracts governing institutional sales by January 19.
The SEC, having filed a Motion to Compel on January 11, seeks an order from the court compelling Ripple to submit the requested documents. The deadline for completing remedies-related discovery is set for February 12. During this period, Ripple aims to mitigate potential penalties by showcasing net proceeds from XRP sales to U.S. institutional investors, while the SEC seeks punitive disgorgement following the Programmatic Sales of XRP ruling by Judge Analisa Torres.
Despite the ruling that XRP is not a security in Programmatic Sales, Ripple may find support in U.S. case law, such as the Morrison v NAB decision, limiting SEC jurisdiction to U.S.-based sales. The court’s decision on penalties will undoubtedly attract attention, but the SEC’s intentions to appeal the Programmatic Sales ruling add an additional layer of significance.
SEC vs. Coinbase: A Pivotal Hearing
Simultaneously, the SEC’s battle with Coinbase (COIN) unfolds, with the outcome potentially influencing the SEC’s plans to appeal the Programmatic Sales ruling. Coinbase filed a motion to dismiss in August, contending that the SEC lacks the statutory authority to regulate crypto exchanges.
Judge Katherine Failla is set to hear oral arguments on the Coinbase motion on Wednesday, January 17. A ruling in favor of Coinbase would impact the broader crypto market positively. However, recent legal determinations, such as the Terraform Labs ruling regarding TerraUSD and Luna as securities, may decrease the likelihood of the court granting Coinbase’s motion.
The SEC, in a strategic move, has requested the consideration of the Terraform Labs ruling in the Coinbase case. Should the motion to dismiss be denied, the SEC v Coinbase case may introduce further uncertainty into the U.S. digital asset space, potentially allowing the SEC to continue regulatory actions through enforcement rather than a defined framework.
Market Analysis and Future Outlook for XRP
Turning our attention to XRP’s market performance, the daily chart indicates a bearish near-term sentiment as XRP remains below the 50-day EMA while holding above the 200-day EMA. A breakthrough above the $0.5835 resistance level could propel XRP towards the 50-day EMA, setting the stage for a challenge at the $0.6354 resistance level.
Conversely, a fall through the 200-day EMA would bring the $0.5470 support level into play. The 14-day RSI reading of 43.07 suggests a potential decline through the $0.5470 support level before entering oversold territory.
On the 4-hourly chart, XRP maintains a bearish stance below the 50-day and 200-day EMAs. An upward move beyond the 50-day EMA and the $0.5835 resistance level would support a move to the 200-day EMA. Conversely, a drop below the $0.57 handle could lead to a challenge at the $0.5470 support level. The 4-hourly RSI reading of 46.44 indicates a possible decline to the $0.5470 support level before entering oversold territory.
As Tuesday unfolds, market participants will closely monitor updates on the SEC’s legal battles within the crypto space, recognizing the potential impact on XRP and the broader market.
