Ripple (XRP) is exhibiting signs of choppy trading early on Tuesday after rallying by over 25% during the previous session. At the time of writing, XRP/USD is trading at around $0.97, lower than Monday’s high of $0.99474.
Ripple was not immune to the overall market crash that brought down almost all cryptocurrencies – especially the majors, losing around 50% of its value last Wednesday. However, the digital currency has recovered significantly then, although it is yet to hold above the key $1 level, while just a few days ago, we were optimistically predicting how the bull run in this crypto could see it testing the $2 level soon.
In addition to the cautious mood in the market following China’s decision to clampdown on crypto trading and cryptocurrencies overall, XRP is facing additional downward pressure due to the recent developments in the ongoing lawsuit between Ripple and the SEC.
The court ruled against the company’s attempts to stop SEC from its overseas activities to obtain information from Ripple’s foreign partners. The next challenge the firm behind XRP faces is in keeping the SEC from gaining access to legal advice it received back in 2012 about the nature of the XRP token.
The lawsuit will be closely followed by crypto investors as well as regulators, as its outcome could not only dictate XRP’s status as a security but have important ramifications on the overall crypto market as well. It could drive the need for stricter regulations of this space, a key concern given the high levels of volatility and uncertainty investors experience in this sector.
Key Levels to Watch
Technical analysis of the 4-hour chart of XRP/USD is offering mixed signals, with indicators MACD and momentum signaling a bullish bias but the moving averages exerting selling pressure. For now, the price sits well above the support at $0.83 level, offering traders some relief.
However, a bullish trend can only be confirmed once buyers manage to take the price above the key $1 level and makes its way higher until the pivot at $1.37. A break past this level can see the uptrend sustain at least until above $1.90 where buyers could face some resistance.