Important Takeaways: • On Wednesday, May 8, XRP experienced a 1.58% decline, concluding the day at $0.5167.
• In the ongoing SEC vs. Ripple lawsuit, investors kept replying to the redacted version of the SEC rebuttal brief.
• As investors contemplate the next stages in the SEC v. Ripple case, talk about the issue will continue to dominate Thursday, May 9.
SEC vs. Ripple: Stuart Alderoty, CLO, Alludes to Lawsuit Finale, But XRP Stablecoin War May Start Soon . XRP dropped by 1.58% on Wednesday, May 8. On Tuesday, May 7, XRP had a 2.83% decline before closing the day at $0.5167.
SEC v. Ripple: SEC’s Rebuttal Brief Makes a Difference
As the ongoing SEC vs. Ripple litigation entered its last stages, the SEC filed a redacted version of the reply brief on Tuesday, May 7. The cryptocurrency community expressed strong disapproval of the move.
However, investors will probably be concerned about a few of the SEC reply brief’s assertions. Especially interesting are the SEC’s arguments about Ripple’s intentions to introduce a stablecoin and the sales of XRP to institutional investors following the complaint.
According to the SEC, US securities laws were broken by ODL institutional sales prior to the complaint. Crucially, the SEC contended that, once released, Ripple’s stablecoin will violate US securities regulations and be an unregistered security.Regarding the reply brief, Jeremy Hogan of Hogan and Hogan stated, “The Ripple v. SEC briefs are FINISHED! In my opinion, the SEC left this situation with a whimper. It only mentioned that Ripple was attempting to re-litigate the matter, which is true, without even attempting to criticize ODL sales. It also didn’t result in any new damages. I’m just awaiting The Judge right now.
Following the filing of the reply brief, a few formalities need to be fulfilled by the parties and any outside parties. Subsequently, the courts will determine the fine that Ripple is required to pay for violating US Securities Act of 1933, Section 5. Whether the courts take into account XRP sales to institutional investors who are not in the US will be one topic of attention.
US and non-US sales were not distinguished in the SEC’s opening and reply briefs. The US Supreme Court decided in Morrison v. NAB that the SEC is only able to regulate sales that occur in the US. Ripple contended in the opposing brief that the majority of ODL business occurs outside of the US.
The SEC credibly claims that the District Judge may take post-complaint activity into account when evaluating whether an injunction is necessary and just, but Judge Sarah Netburn was unambiguous in her position regarding post-complaint compliance with US securities laws.
Following the complaint, if the judge finds that Ripple violated US securities laws, Ripple might be subject to a hefty penalty. More importantly, the court may grant the SEC’s request for an injunction, which would stop Ripple from offering XRP for sale to US institutional investors.
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intentions by Ripple to expand its US operations could be impacted by an injunction and the SEC’s opinion of the company’s intentions for a stablecoin. Investors should also take into account the likelihood of an SEC appeal against the Programmatic Sales of XRP judgment.
Price Action of XRP
The daily chart for XRP confirmed the negative price indications by staying below the 200- and 50-day EMAs.
A move towards the 200-day EMA and the $0.5739 resistance level would be supported by an XRP break over the 50-day EMA. The bulls may be able to challenge the $0.60 handle if they manage to break above the resistance level of $0.5739.
Investors should take into account SEC activity and news pertaining to the SEC vs. Ripple lawsuit.
On the other hand, XRP breaking through the trend lines might indicate a decline below the $0.50 mark.
Indicating an XRP decline through the $0.50 handle before reaching oversold territory is the 14-day RSI reading of 44.88.
Chart for Four Hours
XRP continued to trade below the 200-day and 50-day moving averages on the 4-hourly chart. The bearish price patterns were verified by the EMAs.
Bulls may have a run at the $0.5361 resistance level if XRP breaks over the 50-day EMA. A rise to the 200-day EMA would be supported by a break above the $0.5361 resistance level.
Sub-$0.50 levels would become relevant, though, if XRP broke below the trend lines.
Before moving into oversold territory, the 14-day RSI reading of 42.40 points to an XRP decline through the $0.50 handle.