In a fortune reversal, Ripple’s XRP crashed drastically when investors responded to a Securities and Exchange Commission (SEC) lawsuit claiming the token is illegal security.
The US securities regulator has sued San Francisco-based Ripple Labs and its two executives for allegedly selling $ 1.3 billion worth of XRP in an unrecorded public sale.
“We claim that Ripple, [Chris] Larsen and [Brad] Garlinghouse failed to register their ongoing offer and sale of billions of XRP to retail investors, preventing potential buyers from getting adequate disclosures about XRP and Ripple’s business and other important long-term protections that are fundamental to our robust public market system, ”Stephanie Avakian, the director of the SEC’s enforcement department said in a statement.
Nonetheless, Brad Garlinghouse, CEO of Ripple, has dismissed the SEC lawsuit by calling it “fundamentally false as a matter of law and fact.” He promised to take the supervisor to court. Unfortunately, his XRP insurance did little to help him get out of his ongoing freefall.
The cost of purchasing a single XRP token has dropped by a whopping 37.94 percent in response to the SEC’s charges. It happened when total XRP long liquidations crossed the $ 36.5 million mark in the last 24 hours.
Meanwhile, XRP’s potential to record extensive losses increased further after OSL, a Hong Kong-based trading platform, scrapped its Ripple-focused services. Some community members agreed it could prompt other exchanges to scrap XRP as well.
Some thoughts on it $ XRP
-Problems with the SEC = You are f ** cked
-November’s pump, backed by the airdrop, can be initiated by whales as a last chance to dump at high prices
-First withdrawal from the stock exchange $ XRP can cause a chain reaction
-I am done $ XRP
-Chart looks awful pic.twitter.com/Dv4Bw3B7Ft
– Crypto $ Hannibal (@ c22_v1) December 23, 2020
That raised the concerns of a Long Squeeze – a situation where investors with long positions feel the need to sell in a falling market to limit their losses.
XRP has completely invalidated the Bull Flag indicator after its strong upward rally last week on a technical level. As can be seen in the chart below, the token broke below the consolidation pattern to convert crucial support for USD 0.33 into resistance.
The Ripple token eyes further downside correction as the SEC FUD grows. Source: XRPUSD on TradingView.com
Traders are now looking at an extensive correction to levels of historical value. First in line is USD 0.26 which served as resistance during the September-November consolidation period. Breaking below the flipped level, the XRP price test would have a downward target of $ 0.20.