- XRP bulls put effort into defending the $2.00 support as the crypto market recovers from tariff-triggered drawdowns.
- Whales embark on a fresh risk-on mode, scooping more XRP tokens ahead of a possible climb to $3.00.
- A MACD buy signal and an uptrending RSI reinforce the bullish momentum on Monday.
- A 2.75% drop in the derivatives’ open interest calls for caution among traders and suggests potential downside risks.
Ripple (XRP) price grinds higher and trades at $2.15 during the early European session on Monday. The token sustained a bullish outlook throughout the weekend supported by bullish sentiment from the 90-day tariff suspension in the United States. Based on the current fundamentals and technical structure, XRP showcases immense potential to keep the uptrend intact, targeting key resistance levels at $2.75 and $3.00, respectively.
XRP whales go on a buying spree as risk-off sentiment fades
Global markets, including crypto, have suffered under heightened liquidity and sustained drawdowns since April 2, when United States (US) President Donald Trump announced reciprocal tariffs. Digital assets like Bitcoin (BTC), Ethereum (ETH), and XRP started recovering mid-last week, as President Trump changed his tune on tariffs, suspending the new policy for 90 days.
However, the President turned the tariff war a notch higher on China, levying the Asian economic giant a 145% duty on goods exported to the US. China, not relenting, retaliated with a 125% duty on United States goods, adding that it would fight to the end.
President Trump made another surprise move on Friday, exempting certain goods, including smartphones, computers, and devices like semiconductors, from his reciprocal tariffs, according to a CNBC article.
The cryptocurrency market continued to trade positively over the weekend despite President Trump clarifying that exemptions are not permanent. Moreover, he said goods will still attract the existing 20% fentanyl tariffs.
XRP whales responded positively to the tariff news from the middle of last week, increasing their holdings. Per Santiment’s data, wallets with between 1 million and 10 million XRP have grown to hold 9.27% of the total supply. Similarly, addresses between 10 million and 100 million accounted for 11.61% of the total supply. These wallets’ gradual but steady growth hints at rising risk appetite among the whales. If the uptake of XRP continues, bullish momentum could soar, lifting XRP price towards the $3.00 level.
XRP price on the cusp of a breakout
XRP holds between two key levels highlighted by the 200-day Exponential Moving Average (EMA) at $1.95 as support and the short-term confluence resistance showcased by the 50-day EMA and the 100-day EMA at $2.25.
A buy signal from the Moving Average Convergence Divergence (MACD) indicator further affirms the bullish outlook. As the MACD recovers toward the mean line and histograms flip green, the path of the least resistance clears, targeting previously tested resistance levels at $2.75 and $3.00.
The Relative Strength Index (RSI) indicator, holding neutral at 49.95 while trending higher, upholds the bullish outlook. Traders could seek more exposure as the RSI steadies into the upper neutral half. Note that breaching the descending trendline resistance in the RSI indicator would further reinforce the bullish grip.
XRP/USD daily chart
On the other hand, traders must be cautious not to overexpose their capital, considering the drop in the derivatives’ Open Interest (OI) by 2.75% in the last 24 hours to $3.29 billion. A 40% drop in volume to $9.99 billion in the same timeframe could mean that existing positions are closed significantly, dampening bullish momentum.
XRP derivatives data | Source: Coinglass
Liquidations hit $13.86 million in the last 24 hours, with long positions being the hardest hit at $8.2 million amid $5.66 million in short positions. As the price increases, long position holders may choose to take profit, reducing their exposure. Moreover, a decline in OI suggests that traders lack the conviction to open new positions.
SEC vs Ripple lawsuit FAQs
It depends on the transaction, according to a court ruling released on July 14, 2023:
For institutional investors or over-the-counter sales, XRP is a security.
For retail investors who bought the token via programmatic sales on exchanges, on-demand liquidity services and other platforms, XRP is not a security.
The United States Securities & Exchange Commission (SEC) accused Ripple and its executives of raising more than $1.3 billion through an unregistered asset offering of the XRP token.
While the judge ruled that programmatic sales aren’t considered securities, sales of XRP tokens to institutional investors are indeed investment contracts. In this last case, Ripple did breach the US securities law and had to pay a $125 million civil fine.
The ruling offers a partial win for both Ripple and the SEC, depending on what one looks at.
Ripple gets a big win over the fact that programmatic sales aren’t considered securities, and this could bode well for the broader crypto sector as most of the assets eyed by the SEC’s crackdown are handled by decentralized entities that sold their tokens mostly to retail investors via exchange platforms, experts say.
Still, the ruling doesn’t help much to answer the key question of what makes a digital asset a security, so it isn’t clear yet if this lawsuit will set precedent for other open cases that affect dozens of digital assets. Topics such as which is the right degree of decentralization to avoid the “security” label or where to draw the line between institutional and programmatic sales persist.
The SEC has stepped up its enforcement actions toward the blockchain and digital assets industry, filing charges against platforms such as Coinbase or Binance for allegedly violating the US Securities law. The SEC claims that the majority of crypto assets are securities and thus subject to strict regulation.
While defendants can use parts of Ripple’s ruling in their favor, the SEC can also find reasons in it to keep its current strategy of regulation by enforcement.
