Ripple’s XRP dropped on the lawsuit news by 13% during the early European Session as we reported previously in the Ripple XRP price news.
The XRP/USD pair dropped to $0.44 and the move downwards took cues from the latest two fundamentals. The first one was the wider correction trend seen across the crypto market which saw many other coins like Ethereum and bitcoin in a similar downward trajectory. The second fundamental was Ripple’s chances of facing a potential lawsuit from the US Securities and Exchange Commission over its XRP sales. The traders saw this as their cue to dump their XRP holdings while correcting lower from the year to date top of $0.79, as the analytics company Santiment wrote:
“As news broke about Ripple expecting to be sued by the SEC, social volume for XRP understandably exploded for crypto‘s #3 market cap asset. There has also been an increase in tokens being moved to exchanges, as prices have dropped -17% the past day.”
The SEC lawsuit revolves around whether or not Ripple Labs did an unlawful thing when they sold the XRP token to raise funds for the blockchain platform back in 2017 which is a move that will deem the entire event as a securities sale. Ripple now holds about $6.4 billion XRP while the company also has 48 billion more XRP locked in an escrow which sells to the public periodically.
XRP forms a bull flag now with the traders interpreting it as a bullish continuation pattern which occurs a short pause following the sharp price move higher. The pattern looks like the downward sloping channel confirmed by the two parallel trendlines against the previous trends. XRP/USD should technically try to break above the Flag’s upper trendline in order to continue the uptrend. If another move like this happens, the pair could grow by about the same height of the flagpole that formed before the flag itself. The height is 0.27 which puts the pair en route to $0.8 in the upcoming sessions.
In the meantime, if the price retraces by about 50% from its flag top, it could invalidate the entire bullish continuation theory. Ripple’s XRP dropped on the lawsuit news but what will happen to coin we will see further in the next news.
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