XRP Plunges by 30% Following the Japan Trigger: Could the Ripple vs. SEC Case Salvage Something Back?
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XRP has plunged by 30%, driven by developments in Japan and ongoing legal issues with the SEC.
Traders are now closely watching key support levels and potential outcomes of the Ripple vs. SEC case for any signs of recovery.
XRP has experienced a significant downturn, plummeting 30% from its July highs and pushing weekly losses to over 25%. Despite initial bullish optimism, the price of XRP failed to hold above critical support levels, leading to a sharp correction. This bearish momentum has traders concerned, especially as market dynamics shift in response to external factors, including developments in Japan and the ongoing legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC).
Japan’s Influence and Key Resistance Levels
The daily chart reveals a troubling formation for XRP bulls. Despite hopes for a strong rebound to $0.66, XRP fell below crucial support levels of $0.55 and $0.50 within a few days. Immediate resistance is now seen at $0.50, with stronger resistance at $0.55. The decline has increased the average trading volume to over $2.8 billion, indicating heightened market activity amid the drop.
The bearish outlook is further supported by technical analysis. If XRP prices fail to reverse current losses and reclaim the $0.52 level, aggressive traders might continue shorting, targeting $0.40. This scenario will be particularly relevant if sellers double down this week, invalidating the breakout that previously lifted XRP above $0.62.
Ripple vs. SEC: Settlement Rumors and Market Impact
Adding to the bearish sentiment, recent rumors of a possible settlement in the ongoing legal battle between Ripple and the SEC have sparked significant market reactions. Ripple recently unlocked 1 billion XRP, valued at approximately $579.43 million, from escrow. This move fueled speculation about a settlement, but it also led to an 8% slump in XRP’s price.
Legal experts have weighed in on the situation, offering mixed opinions on the likelihood and impact of a settlement. Pro-XRP attorney Bill Morgan described a potential settlement as “unlikely” but suggested it could be a compromise rather than a major victory. On the other hand, former SEC lawyer Marc Fagel reinforced that the rumored XRP SEC meeting is likely a hoax and predicted appeals from both sides, complicating the resolution of the case.
Critical Zones and Potential Recovery
The zone between $0.44 and $0.50 remains critical for XRP. This range represents a significant Fibonacci retracement area, and any failure to hold within this zone could pave the way for further declines towards $0.40, reversing all gains made in July 2024. However, a successful spike lifting XRP/USD above $0.62 could signal a resumption of the previous bull run, potentially pushing prices to $0.66 and $0.74.
As Ripple prepares to tokenize U.S. treasuries on the XRP Ledger, on-chain data shows plummeting transaction activity, with Q2 2024 transaction volume crashing by over 65%. This decline in activity, coupled with the ongoing legal uncertainty, continues to pressure XRP prices.
XRP faces significant bearish pressure with key resistance levels ahead. The market is closely watching for any developments in the Ripple vs. SEC case, which could dramatically influence XRP’s price trajectory. For now, traders are concerned about the implications of the Japan trigger and are eyeing the critical $0.40 mark as the next potential target if bearish momentum persists.
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