XRP, the cryptocurrency linked to Ripple Labs, currently faces significant pressure due to renewed legal actions from the U.S. Securities and Exchange Commission (SEC). Following this news, XRP’s price dropped by 2%, raising concerns about a potential further decline of up to 30%.
SEC’s Legal Actions Target Ripple’s Executives
On October 17, 2024, the SEC filed an appeal in its ongoing lawsuit against Ripple Labs. Notably, this appeal does not contest the previous ruling that XRP transactions involving retail investors are not classified as securities. Instead, it seeks clarification on whether earlier court decisions regarding Ripple’s senior executives were misapplied. The SEC’s request for a “de novo” review indicates that the court will reassess the case entirely. This development could significantly impact Ripple’s business operations and the broader cryptocurrency landscape.
Market Reactions and Trading Activity
In response to this news, XRP’s trading volume has noticeably decreased. Currently, its price hovers around $0.54. Additionally, the Network Value to Transactions (NVT) ratio has surged to a yearly high of 634. This rise suggests that XRP may be overvalued given its declining price, indicating weak buying pressure in the market.
Interestingly, short-term traders exhibit increased selling activity while long-term holders maintain stability. Data shows no significant movement in long-held assets among long-term holders. This divergence highlights potential volatility in XRP’s price in the near term.
Future Price Predictions for XRP
At present, XRP sits just above critical support at $0.52. Analysts predict that if selling pressure from short-term holders continues to escalate, XRP could decline towards this support level. There is a possibility of further drops to approximately $0.38, representing a 30% decrease from current values. Conversely, if selling activity stabilizes and demand resurfaces, XRP might rise through resistance levels. Optimistically, it could target $0.65 if market sentiment improves.
The SEC’s renewed legal actions present both challenges and opportunities for XRP. While short-term traders face increased selling pressure leading to potential declines, long-term holders exhibit confidence in XRP’s future. As legal proceedings unfold and market conditions evolve, investors should remain vigilant and closely monitor developments that could impact XRP’s value proposition within the cryptocurrency ecosystem.
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