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XRP Price Dumps 23%, SEC Suing Ripple Provides Clarity for Banks

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The Ripple price is free-falling, dumping double digits in the last three days.

At the time of writing (Dec 23), the XRP price was trading at $0.33, down 21 percent on the last 24 hours and 23 percent in the last week of trading.

Notably, after the United States Securities and Exchange Commission (SEC) bombshell, investors are shaken.

The sell-off is not only rewinding gains of Dec 15 and 16 but confirming losses of late November, correcting the over-valuation of Nov 25.

Ripple (XRP) Price Overview

XRP bulls are hopeful of a price recovery despite the slump of the last few days.

From the daily chart, it appears XRP sellers will press prices lower back to Nov 2020 lows of $0.20.

This is by judging from the price action from Dec 21, and the rapidity of the dump. Notice that accompanying the dump is an uptick in trading volumes, exceeding last week’s average.

Also, already, after strong gains of Dec 16 and 17, bears have the upper hand from an Effort versus Results perspective.

Losses of Dec 22 and today’s confirmation not only nullified hopes of further gains after the double-bar bullish reversal pattern but also set the pace for sellers aiming at $0.25 and $0.20, respectively.

These are important reaction points, critical resistance, and support levels before the lift-off of late November 2020.

However, how the XRP/USD price recovers in the immediate to medium term depends on the outcome of the court case.

Ripple (XRP) Market Movers

Brad Garlinghouse, Chris Larsen, and Ripple are the defendants. The SEC is alleging that the blockchain company sold unregistered securities to Americans, raising $1.3 billion.

At the heart of their complaints, the SEC claims XRP should be treated as a share of a company, that is, a security, not a currency like Bitcoin and Ethereum.

Stephanie Avakian, the Director of the Enforcement Division at the SEC, told CNBC that the defendants failed to register their offering, therefore failing to disclose to their clients their business and other long-standing protections that are fundamental in “America’s robust public market system.”

Brad Garlinghouse is accusing the agency of cherry-picking winners and stifling crypto innovation in the United States. In doing so, they are allowing projects, like Ethereum and Bitcoin–that he alleges are under the grip of China, to flourish.

He’s confident that they will win since they are on the right side of the law and history. Other investors are also confident that Ripple will pull through.

The clarity that comes with the court case will allow financial institutions to adopt On-Demand Liquidity (ODL) and XRP in their operations.

Ripple Price Prediction

XRP Price Dumps 23% but SEC Suing Ripple is Bullish in the Long-term

Fundamentally, clarity will be bullish for XRP prices.

At the time of writing (Dec 17), sellers have the upper hand.

Despite the draw-down, there is a silver lining for bulls in the immediate term. Even with the declaration from the SEC, losses were not very sharp. Two days later, prices are still trending inside Nov 2020 range with relatively lighter trading volumes.

Specifically, the dip below $0.40 and Dec 16 is with comparatively lower trading volumes.

While the FUD will trigger wholesale dumps, bears should aim at the $0.20 and $0.25 trade range of early Nov.

They are potential support levels where bulls might find reprieve before the XRP/USD pair rally back to $0.30 in the medium term.

Further losses below $0.20 could see XRP prices dump to $0.16.

Chart Courtesy of Trading View

Disclaimer: Opinions are those of the author, and are not financial advice. Do your research.

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