XRP price fell 21% in two days on Coinbase from $ 0.5695 to $ 0.4491. The decline was accelerated by Dec. 22 reports from the U.S. Securities and Exchange Commission (SEC) is preparing a lawsuit against Ripple.
Today the SEC voted to attack crypto. Chairman Jay Clayton – in his latest act – picks winners and tries to limit US innovation in the crypto industry to BTC and ETH. We know that crypto and blockchain technologies are not going anywhere. Ripple has and will continue to use XRP because it is the best digital asset for payments – speed, cost, scalability, and energy efficiency. It trades on more than 200 exchanges worldwide and will continue to thrive. “
XRP price dropped about 13% after Garlinghouse’s tweet as some of the industry executives expressed concern about the situation.
Meanwhile, cryptocurrency traders are mixed on where XRP is headed. Some say it may not have an immense impact on price like Ripple faced with regulatory hurdles. Others believe that this could keep XRP stagnant.
Ripple’s situation is different from that of Block.one, says lawyer
One of the main points of discussion of the reported lawsuit against Ripple by the SEC is the difference between Ripple and Block.one.
Block.one, the company behind the EOS ecosystem, settled with the SEC for $ 24 million before there was an active lawsuit.
Since Ripple expects to deal with active lawsuits, the transactions between Block.one and the SEC are different from Ripple’s. Jake Chervinsky, a general counsel with Compound Finance, said:
No. The EOS promotion only related to the EOS ERC-20 token on Ethereum, not the native EOS token on the EOS blockchain.[dot]one settled with no active lawsuits, and by then the ERC-20 token was no longer trading. Here, SEC is claiming that an actively traded token is a security. “
Chervinsky also pointed out the possibility of centralized exchanges to temporarily drop XRP while the case is pending. As there is no historical priority for this type of regulatory conflict, this remains uncertain. He wrote:
“We have plenty of time to talk about the merits of the SEC’s Ripple enforcement action after the complaint comes out. At the moment, the big question is whether centralized exchanges will scrap XRP while the case is pending. I bet a lot of lawyers are currently making emergency calls. “
Immediately after the news was released, the volume on social media for the keyword ‘XRP’ rose, according to to analysts at Santiment.
What will happen to the XRP price now?
XRP price rose sharply in November, breaking a multi-year downward trend, such as the Bitcoin price (BTC) surpassed $ 18,000. At the time, XRP an impulse rally on Coinbase, given a brief fear of missing (FOMO) uptrend in the US market.
Trader and Cointelegraph Markets analyst, Michael van de Poppe, stressed that after a massive impulse wave, a heavy retracement is likely. He explained:
“XRP is looking for further correction as it tests the $ 0.45 range for the third time while consistently making lower highs. Very natural to see less volatility and correction after such an impulse wave.”
However, some traders say that after this downturn, XRP could consolidate and the lawsuit could turn out to be a “nothing citizen”.
Meanwhile other traders to argue that the tough approach from regulators could reinforce negative market sentiment around XRP and push the price further. As the chart above shows, sentiment around XRP hit new lows when news of the SEC lawsuit was revealed.