Yerevan (CoinChapter.com) – Ripple Lab’s native token XRP saw gains in the past few sessions after a significant lead in the lawsuit filed against it by the Securities and Exchange Commission (SEC). The upside trajectory changed course after an ambiguous tweet on Bitcoin (BTC) from Elon Musk.
The billionaire CEO of Tesla and SpaceX tweeted a Bitcoin hashtag along with a broken heart emoji. The tweet was enough to break the benchmark cryptocurrency’s bullish momentum and initiate a new wave of declines. As a result, BTC/USD lost 5 percent in the last 24 hours and traded under $37,000 in Friday’s early London session.
Where is XRP?
As the alpha crypto went down, it took smaller coins along for the ride. XRP also took the brunt owing to its higher positive correlation with Bitcoin — a 0.90 correlation efficiency, according to Correlation Watch — and fell by up to 15.89 percent from its Thursday peak level.
The token’s 20-day exponential moving average (EMA-20; the blue wave in the chart above) capped XRP’s bullish attempts. Traders also unloaded their long exposure near the $1.03-level, signaling a short-term bearish outlook. The horizontal level earlier served as support.
SEC vs Ripple
XRP’s gains preceding the infamous tweet were due to a positive spin in the SEC vs. Ripple lawsuit, initially filed in December 2020.
In hindsight, the law enforcement agency charged the Ripple CEO Brad Garlinghouse and the former CEO Chris Larsen, accusing them of selling $1.3 bn worth of XRP as unregistered securities, making a personal profit cheating investors worldwide.
The recent court proceedings, however, dealt Ripple a winning hand. Magistrate Judge Sarah Netburn granted the company permission to access the SEC’s internal documentation concerning the definitions the agency used while mentioning various cryptocurrencies.
She also denied the Commission’s motion to access documents containing legal advice that the startup received on whether or not the initial XRP offering was compliant with US investment laws.
In the latest development, both parties refused to back down. As a result, Ripple Labs filed a request to involve offshore exchanges (iFinex, Noah Trade, BGH One, Bitlish, BMXDM Technology, and others).
In addition, the company sought assessment on XRP’s status and assistance from local authorities of the respective countries (Singapore, Cayman Islands, Hong Kong, South Korea, the UK, Malta, and Seychelles).
The SEC, in its turn, filed a request to gain extension on both fact and expert discovery by 60 more days. Unfortunately, no official responses have been announced as of the moment on either of those requests.
XRP, as the native token of Ripple Labs, is dependant on the lawsuit. The token gains from any courtroom win. The latest victory was not an exception. However, as an altcoin, it is also dependant on Bitcoin. BTC’s setback rained on XRP’s parade, as the latter saw a 9.6 percent loss. The upcoming sessions will tell if the token would be able to recover.