Ripple’s XRP has surged in recent hours, driven by heightened speculation over the possibility of an appeal by the U.S. Securities and Exchange Commission (SEC) in its ongoing legal battle with Ripple Labs. The court’s ruling in favor of Ripple back in July was seen as a significant win for the company, but rumors swirling about the SEC’s potential appeal have once again injected volatility into XRP’s price action.
Will the SEC Appeal Ripple’s Victory?
A key deadline looms for the SEC: October 7, 2024. This is the final date for the agency to challenge the court’s decision. In a post on X (formerly Twitter), lawyer and U.S. Massachusetts candidate John Deaton noted that while it might seem unlikely for the SEC to win an appeal, the agency could still pursue it—especially under the leadership of SEC Chair Gary Gensler. According to Deaton, it “makes no sense” for the SEC to appeal the ruling, but Gensler’s unpredictable approach might push the agency toward this next legal step.
At the heart of the legal dispute is Judge Analisa Torres’ ruling, particularly her application of the 3rd prong of the Howey Test, which assesses whether certain assets are considered securities. Deaton argues that an appellate court would likely uphold the decision, but the very possibility of an appeal is enough to stir the market.
On-Chain Metrics Show XRP Accumulation
Despite the legal uncertainty, XRP bulls have gained significant momentum. On-chain metrics point to strong accumulation across the XRP network. The mean coin age has trended higher throughout September, suggesting that long-term holders are accumulating XRP instead of selling. Additionally, outflows from major cryptocurrency exchanges indicate that investors are moving their XRP off platforms, a bullish sign that they expect further price increases.
Dormant XRP addresses have also stayed quiet since September 21, avoiding the type of sell-offs that can trigger price corrections. Combined with recent price gains, this quiet period has allowed short-term holders to remain profitable. As a result, the 30-day MVRV (Market Value to Realized Value) ratio has climbed, signaling that some investors may begin taking profits, which could lead to a temporary pullback.
Spot CVD and Technical Indicators Flash Caution
While the bullish trend is strong, technical indicators are showing mixed signals. The On-Balance Volume (OBV) has broken through its mid-September highs, indicating robust buying pressure. The Chaikin Money Flow (CMF), which measures capital inflows and outflows, also points to strong market activity, holding above the critical +0.05 level.
However, the Spot CVD (Cumulative Volume Delta), which measures the volume difference between buyers and sellers, has shown early signs of weakening. This suggests that the buying power driving XRP’s recent surge may not be sustainable. Further adding to the caution, the Moving Average Convergence Divergence (MACD) indicator is signaling upward momentum, but it could reverse if buying pressure slows.
XRP has recently broken through a ten-week resistance level at $0.62, giving the bulls hope of further gains. However, the token faces strong resistance at $0.71, a long-term range high that could trigger a pullback if buyers fail to break through.
As the SEC’s October 7 appeal deadline approaches, XRP’s price volatility is expected to increase. Speculation about the agency’s next move could push the token higher in the short term, but traders should be cautious of profit-taking and technical resistance at $0.71.
Also Read: XRP Soars 3.59% As It Breaks $0.60 – Is A New Bull Run Coming?
With strong accumulation patterns and market sentiment in favor of XRP, the bulls seem to have the upper hand for now. However, a potential appeal or weakening technical indicators could swiftly change the market’s direction.
XRP’s recent gains highlight the cryptocurrency’s resilience despite ongoing legal uncertainty. Investors should keep a close eye on the October 7 deadline as Ripple’s legal saga with the SEC enters a potentially decisive phase.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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