NOIDA (CoinChapter.com)— XRP’s recent price dynamics reveal a dwindling impact from its legal victory in the SEC Ripple lawsuit. Despite an initial surge, XRP’s momentum appears to wane, with the token struggling to maintain its gains.
The market has focused on other factors, including broader legal developments and institutional endorsements, to gauge XRP’s future direction. As the dust settles, the question remains whether XRP can sustain its position or if further challenges lie ahead.
Legal Developments and XRP’s Market Sentiment
XRP supporters, including Ripple’s Chief Legal Officer Stuart Alderoty, have hailed the recent Kraken judgment as another significant blow to the SEC’s attempts to regulate crypto by enforcement.
The court’s decision that none of the tokens trading on Kraken are securities mirrors the earlier Ripple case, reinforcing the argument that XRP should not be classified as a security. Alderoty and other XRP advocates view the ruling as a potential catalyst for XRP’s future, believing it could undermine the SEC’s broader regulatory agenda.
While the Kraken judgment does bolster the legal standing of XRP and similar cryptocurrencies, it also highlights the ongoing battle between regulators and the crypto industry. The ruling temporarily shields XRP, but the market’s reaction suggests a more cautious outlook.
Investors are weighing the long-term implications of this legal win. Given the current market conditions, some view it as a stepping stone for future XRP gains, while others remain skeptical.
The Grayscale tweet adds another layer to this narrative. While it primarily serves as a weekly performance snapshot, the mention by an investment giant like Grayscale could serve as a psychological boost for XRP.
Institutional recognition often influences retail investor behavior, potentially driving up demand as traders anticipate further validation from major financial players.
Analyzing the Bearish Indicators
Despite the positive legal developments and Grayscale’s recognition, the on-chain data for XRP suggests a bearish outlook.
The OI-weighted funding rate has dipped into negative territory, indicating a market sentiment leaning toward short positions. Moreover, the negative funding rate suggests that traders expect XRP’s price to decline and are willing to pay a premium to maintain their short positions.
Meanwhile, the slight uptick in open interest further corroborates this bearish sentiment. The increase in OI typically signals that new positions are being opened, and in this context, it suggests that more traders are betting on a price drop.
The rise in short positions aligns with the broader market’s cautious stance, as seen in the mixed behavior of large XRP holders.
Furthermore, the Santiment chart reveals a complex picture of large holders’ behavior. While the largest cohort has accumulated, possibly indicating confidence in XRP’s long-term prospects, other significant holders have reduced their positions.
This divergence among whales adds to the uncertainty, with the mixed signals contributing to a potentially volatile market environment.
$0.6 Remains Insurmountable Hurdle
The XRP USD pair failed to conquer the $0.6 price level, hinting at a supply zone near the price level. Since July 17 earlier this year, the Ripple token has made multiple unsuccessful attempts to consolidate above the price mark.
Moreover, moving above the $0.6 price mark would bring the Ripple token price face to face with the 0.618 FIB resistance near $0.63, which has rebuffed XRP USD pair five times in less than 6 weeks.
Hence, flipping the immediate resistance could help XRP price rally to the resistance near $0.68 before any corrections occur.
On the other hand, failure to sustain the rally could result in the Ripple token’s price dropping to the 50-day EMA (purple wave) support level near $0.564. Moreover, breaching the immediate support level might force the XRP USD pair to test the support level near $0.53.
The RSI for XRP remained neutral, with a score of 54.35 on the daily charts.
