In December 2020, the SEC filed a lawsuit against Ripple Labs, accusing it of conducting an unregistered securities offering by selling XRP. Ripple Labs fought back and recently took a partial victory. US District Court Judge Analisa Torres ruled on July 13 that XRP is not a security when it is sold to the general public. This decision was met with great enthusiasm by XRP token holders and resulted in a significant increase in the price of the token. This partial victory over the SEC has sparked speculation about whether XRP is now a top investment choice.
Wait before buying XRP now
In Ripple Lab’s ongoing legal battle with the SEC, a federal judge has determined that the XRP token does not meet the criteria set for a security. However, Ripple’s sale of $729 million worth of XRP to institutions was considered an unregistered securities offering, violating securities laws.
The SEC’s lawsuit against Ripple continues, with a jury deciding whether Ripple executives knowingly participated in unlawfully offering XRP to institutional investors.
While the recent ruling for XRP is encouraging, numerous cryptocurrency advocates are warning against premature celebration. Stephen Palley, a partner at the law firm Brown Rudnick, pointed out that the summary judgment is only partial. In addition, Judge Torres’ ruling does not set a legal precedent. At best, it could provide influential insight for future courts to consider, should they decide to do so.
Palley, among others, highlighted the possibility that the SEC could elect to appeal the decision. This introduces the potential for a higher court to reverse Judge Torres’ rulings.
Therefore, Coinpedia advises investors to exercise caution and not to invest at the current peak prices, as there is a risk of a sudden price reversal that could lead to significant losses. Investing in XRP could become more profitable after a definitive victory over the SEC.
What’s next for the XRP price?
XRP shot past multiple key resistance levels, indicating a bullish trend as the price reached a high of $0.938. However, the bullish trend was short-lived as XRP price quickly made a bearish reversal.
XRP price experienced earnings momentum around $0.94 and followed a sharp bearish rally. Due to a massive liquidation surge, the price fell below multiple Fib channels and gained support near the low of $0.668. Bulls will aim to limit any pullback within the zone below the 38.2% Fibonacci retracement level to $0.63.
If the price rises and continues to trade above $0.75, it will bolster the confidence of the bulls and prevent the price from falling into a bearish channel. A rise to $0.9 could again lead to profit bookings among traders.
If the price remains below $0.75, the price may retest the support at $0.6. A drop below this level could push the price to the 61.8% retracement level, potentially delaying the start of the next uptrend.