On June 28, Ripple Labs CEO Brad Garlinghouse posted on X that they were willing to close the ongoing legal battle with the Securities and Exchange Commission (SEC). The CEO mentioned, “Ripple is dropping our cross appeal, and the SEC is expected to drop their appeal, as they’ve previously said.”
SEC sues Ripple for selling securities without registration
The duo’s legal battle started in 2020 when Gary Gensler chaired the SEC. The regulatory body reported that Ripple violated the Securities Act of 1933, which Congress passed to “protect investors against fraud” and “promote ethical standards of honesty and fair dealing.” However, Ripple argued that its token, XRP, was not a security and hence did not fall under the purview of the SEC.
Ripple disregards summary judgment; continues selling XRP
In June 2023, the court’s summary judgment partly agreed with the SEC as it found Ripple guilty of selling XRP, a security without registration. Despite the summary judgment, Ripple continued to sell these tokens, which was quite a blatant act. In the final judgment of 2024, the court permanently enjoined Ripple from breaking the Act and penalized it with $125M.
Judge Torres rejects joint statement
However, the case started to subside after Donald Trump became president, and Gary Gensler was fired and replaced by Paul Atkins. In a pro-crypto regime under Trump, the SEC and Ripple submitted a joint statement, requesting the court to strike down the injunction and reduce the civil penalty by 60%. However, Judge Analisa Torres rejected the request. Now Ripple has two options: dismiss the appeal challenging the finding on historic institutional sales, or press forward with the appeal.
With CEO Garlinghouse opting to dismiss the appeal, the price of XRP appreciated. The token gained more than 8% in the past week, and it is trading at $2.18, with a trading volume of 1.9 billion, an increase of 38% in the last 24 hours.
Long liquidation reduce Open interest increases– Is it a bull territoy?
The XRP futures open interest is increasing in unison with the XRP prices. The open interest (OI) shows the number of futures contracts open at the moment. The combination of OI increasing with the prices shows that the market is bullish, and many investors are entering the market with long positions, hoping the price of XRP will appreciate.
Adding to the bullish outlook, XRP’s long liquidations have reduced drastically with the increase in prices. This reduction in long liquidation with the increase in price, it usually shows a healthy bull market. As fewers traders are forced to exit their long positions, while the price is climbing, it often signals that the uptrend is sustainable and not just driven by short squeezes or panic volatility.
Golden Cross appears on XRP’s short timeframe
Source: Tradingview
XRP is falling along the descending channel rebounding off of the upper and lower trendline. As the price stay close to the upper trendline, XRP has been support by the 200-day EMA. A fall below the 200-day EMA support level might not happen although the RSI shows a bearish indication at 52 as it heads downwards after crossing the SMA.
On the flipside, the 50-day EMA is approaching the 200-day EMA from below. It is very likely that these two could cross and a golden cross (bullish) could occur. Given that the Golden cross happens, XRP could easily go past $2.3.
