Ripple (XRP) bulls have returned to the flat crypto market, which is cautiously waiting for the US Federal Reserve announcement on interest rate hikes later today.
The price of the seventh top crypto jumped 11.8% to $0.4215 late Tuesday, September 20th, making XRP the biggest gainer of the past 24 hours. The last time Ripple (XRP) traded at similar levels was nearly 4 months ago, at the very end of May 2022. So, what happened?
The crypto space whispers that the main reason for optimism that triggered the XRP price rally could be the approaching end of the long-running lawsuit between Ripple Labs and the United States Securities and Exchange Commission (SEC).
SEC Triggered XRP Price Rally
This weekend, both Ripple Labs and the US government oversight agency have filed motions for summary judgment. Simply put, they both asked the federal judge to conclude the “unregistered securities” lawsuit without a jury trial.
The day after that Ripple’s CEO Brad Garlinghouse met with Caroline D. Pham, the Commissioner of the Commodity Futures Trading Commission (CFTC) overseeing the US derivative markets, who visited Ripple’s office. Although none of the parties disclosed the goal of her visit, the fact of it generated buzz across the XRP community.
Lawyers Say SEC’s Arguments May Destroy Its Ability to Regulate
Despite the agreement on the summary judgment, Ripple Labs’ and the SEC’s fillings revealed totally different arguments and argument scopes, which may have a completely different impact on the market at the end of the proceedings.
According to attorney Jeremy Hogan, the SEC fillings were laser-focused on Ripple’s sales and marketing, and focused “only on the facts about this case,” while Ripple Labs argued the broader concept of how exactly the “investment contract” should be determined.
“If the SEC wins it will only win this case, but if Ripple wins – oh boy – the argument is so broad that it could hamstring the SEC in everything it does from this day forward,” Hogan notes, adding that Ripple’s argument could destroy the SEC’s ability to regulate the digital asset space if it were adopted.
The legal battle between the SEC and Ripple Labs began at the end of 2020 after SEC filed a $1.38 billion lawsuit against the blockchain payment service provider and its executives over the alleged sale of unregistered XRP “securities.”
The lawsuit centers around the question of whether XRP meets the criteria of an “investment contract” determined by a Howey Test and thus is a security. Since the very beginning, the high-profile lawsuit has captured the attention of the crypto community, as it may set a precedent on how digital assets may be treated in the US.
Broke Key Resistance
In addition to the fundamental optimism related to the potentially positive legal outlook for XRP, technical indicators are also signaling an upward price movement.
The XRP price is off of the prolonged $0.32 lows and has just broken through the 20-day Moving Average (MA) and the $0.38 resistance line on a weekly basis.
According to crypto day trader CoinsKid, the XRP price is now on the ascending triangle, a reversal pattern that typically signals a bullish formation that anticipates an upside breakout to $0.50 levels and above.
At the time of writing, XRP is trading at the $0.40 level after recovering from its nearly 7% daily drop to $0.3928. The coin is still 88.1% below its historic highs of $3.40 reached on January 2018.
On the Flipside
- Although the current round of arguments that Ripple and the SEC have filed invoked positive sentiment across the crypto market, both parties are obliged to file another round of arguments in October and November.
- To confirm the long-term breakout, the XRP price has to close and hold above key resistance levels of $0.38 on a weekly timeframe.
Why You Should Care
Ripple is one of the fastest-expanding blockchain payment service providers, directly competing with traditional players in cross-border financial services. If the company wins the legal battle with the SEC, the XRP price is expected to rally, as the ongoing lawsuit with regulatory authority is one of the biggest factors weighing its price down.
Read more on who else is on Ripple’s side:
Powerful Lobbyist Joins Ripple (XRP) vs SEC Lawsuit
Check out more on XRP holders’ class action lawsuit against SEC:
SEC vs Ripple: Hundreds of XRP Holders Join Class Action Lawsuit