- The SEC filing for the interlocutory appeal on the XRP lawsuit has resulted in strong selling pressure on the altcoin.
- The technical chart shows the possibility of the XRP price drop further to $0.42, however, RSI hints at the oversold territory.
On Thursday, August 17, the XRP price entered a severe correction following a broader market correction amid the news that Elon Musk’s SpaceX liquidated $377 million of its Bitcoin holdings. The XRP price came crashing down by slipping under $0.50 levels losing almost all of the games after the Ripple court ruling.
Another news casting a shadow on the XRP price is the U.S. Securities and Exchange Commission (SEC) officially filing a motion of interlocutory appeal on the XRP ruling. Judge Analisa Torres has agreed to the SEC’s request and gave the regulator time until August 18 to submit their response. Similarly, Ripple Labs can also submit their opposition papers by September 1. If necessary, the SEC can further reply by September 8.
XRP Price Can Drop Further to $0.42
As of press time, XRP is trading at $0.5048 with a market cap of $26.6 billion. It’s a steep fall from the July highs of $0.93 and further selling pressure could also lead to a price fall up to $0.42.
The downward trend is gaining momentum due to increased short positions linked to negative sentiment. A sell signal has emerged from the Moving Average Convergence Divergence (MACD) indicator, as the blue MACD line crossed below the red signal line.
The ongoing outflow of funds from XRP markets, as indicated by the Money Flow Index (MFI), is contributing to the selling pressure. This is hindering any attempts to recover toward the $1 mark.
XRP’s current trading position is below key moving averages: the 50-day EMA (red), the 100-day EMA (blue), and the 200-day EMA (purple). This suggests that bears have strengthened their control and are likely to drive further losses below the support level at $0.42.
However, given the highly oversold condition of the Relative Strength Index (RSI), a potential recovery could occur in the near future. The RSI on the four-hour chart has risen from below 10.00 to its current reading of 18.26.
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Traders considering new long positions in XRP might prefer to wait until the price successfully tackles the initial obstacle at $0.51. This achievement would confirm a rebound and set sights on higher levels around $0.62. Confirmation of an uptrend would involve the RSI crossing above the yellow signal line.
Expert Reactions to the SEC Filing
Popular XRP attorney John E. Deaton commented on the development of the SEC filing an interlocutory appeal. He said: “I have to say there is no doubt 75k XRP holders are a major reason the SEC is conceding this issue. We fought to have the judge actually write that the token itself is not the security. In fact, it was the first section in our argument in the Brief.”
Investors will need to exercise patience for Ripple’s response to the SEC motion, which might be sooner than September 1. However, the ultimate court decision won’t be made until the SEC has reacted to any Ripple opposition by September 8. Though Judge Torres swiftly addressed the SEC’s motion for leave to file an interlocutory appeal, this ruling might take more time.
John Deaton anticipates that Judge Torres will likely utilize this opportunity to provide a more comprehensive explanation of her reasoning, make it more resistant to appeal, and address Judge Rakoff’s remarks regarding her ruling.