The XRP price rose sharply against Bitcoin (BTC), indicating continued optimism over a possible settlement between Ripple (a San Francisco-based blockchain payments firm) and the U.S Securities and Exchange Commission.
Settlement rumors fuel XRP price boom
The XRP/BTC exchange rate soared to 0.00002877 on Sept. 23 — its highest level in 13 month — after a 35% price rise versus Bitcoin within one day. In the same period, XRP rose as high as 42% against U.S. dollars.
Daily price chart for XRP/BTC, XRP/USD Source: TradingView
After Ripple and SEC filed motions to the court for summary judgment on September 12, regarding ongoing legal battles over claims that Ripple had committed securities fraud, the big price jumps in XRP markets began.
Ripple and SEC agreed to use all evidence available to determine if the blockchain company illegally raised funds through the sale of XRP before December 2022. This would avoid a trial.
Since Ripple filed its court filing, XRP’s prices have risen approximately 75% to 60% versus Bitcoin, and $62 versus the dollar. This was due to optimism about Ripple winning.
After Ripple CEO Brad Garlinghouse suggested that the same thing in his interview with Fox Business, Sept. 22, the buying process was further accelerated.
BREAKING: Ripple CEO @BGarlinghouse Appears on Fox Business Amid $XRP Price Surge Approaching $0.50 pic.twitter.com/wg6a3QeSly
— HeadlineHunter!U.S. (@HHunter_US September 22, 2022
“People are realizing that the SEC is overreaching. They aren’t following a faithful allegiance the law in pursuit of an outcome […]. The SEC has lost its way.”
Since 2020, XRP whales and sharks are available for purchase
This price rise is also due to the steady accumulation of XRP tokens csince May by wealthy investors.
According to data from Santiment which indicated:
“Active shark and whale addresses holding 1m-10m $XRP have been in an accumulating pattern since late 2020.”
Addresses of shark and whale active XRP. Source: Santiment
In the meantime, entities holding more than 10 million XRP tokens reached an all-time low of 70.75% of their current supply.
In the lead-up to Ripple vs. SEC verdict, it appears traders bought the rumor. It remains to be seen if this will turn into “sell news” but XRP’s technicals hint at a possible correction.
XRP is now a more expensive asset than Bitcoin and the dollar.
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The relative strength indicator (RSI) of XRP/BTC was almost 85 on September 23, which is well above the 70 threshold that usually precedes a price correction or consolidation.
As shown in the chart below, XRP/BTC is already down nearly 10% since its peak 13 months ago. Now, the pair tests 0.00002601 for its short-term support. If it breaks to the downside, it could test 0.00002079 for its primary downside target, or a 20% fall from its current levels by year’s end.
Daily price chart for XRP/BTC Source: TradingView
XRP is now looking for a sharp correction versus USD after crossing paths with a multimonth descending trendline resistance as shown below.
Three-day chart of XRP/USD prices Source: TradingView
XRP could test its horizontal trendline support in the near future by pulling back from its trendline resistance. The XRP/USD pair could fall to $0.31 by 2022, almost 40% less than Sept. 23’s prices.
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