XRP price has posted a higher rally against Bitcoin (BTC) on continued optimism about a possible settlement between Ripple, the San Francisco-based blockchain payments firm, and the US Securities and Exchange Commission (SEC).
Rumors of settlement increase the price of XRP
On September 23, the XRP/BTC pair rose to 0.00002877 – the best level in 13 months – from 0.00002132, a 35% price increase against Bitcoin in one day. Meanwhile, in the same time frame, XRP rose up to 42% against the US dollar.
A big price jump in the XRP market began to appear after Ripple and the SEC filed a motion for summary judgment on September 12 in their ongoing legal battle over allegations that Ripple committed securities fraud.
In other words, Ripple and the SEC agreed that the court should use the evidence to rule in December 2022 on whether the blockchain company illegally sold XRP to raise funds and avoid a trial.
Since Ripple’s court filing, the price of XRP against Bitcoin and the dollar has risen by about 75% and 60%, respectively.
The acquisition accelerated after Ripple CEO Brad Garlinghouse made a similar suggestion in a recent interview with Fox Business on September 22.
BREAKING: Ripple CEO @BGarlinghouse It will be shown on Fox Business Amid $XRP The price increase is approaching $0.50.
– Headline Hunter!US (@HHunter_US) September 22, 2022
Garlinghouse:
“People realize that the SEC is really overreaching and they don’t follow the rule of law to get results. […] The SEC has lost its way.
Starting in 2020, XRP will be bought by sharks and whales
The price increase comes as wealthy investors have been steadily accumulating XRP tokens since May.
Between 1 million and 10 million XRP tokens – the percentage of legal entities known as sharks and whales rose to a total of 6.35% on September 23, 2022, up from 5.43% on December 31, 2020. Sentiment, which states:
“Active Shark and Whale addresses holding between 1m and 10 million dollars of XRP are in accumulation mode from late 2020.”
Meanwhile, entities with more than 10 million XRP tokens at the given time have seen a low of 70.75 percent of the current supply.
Future pain?
Ripple vs. Traders seem to be buying the rumor ahead of the SEC ruling. But while it remains to be seen if this will turn into “selling news” based on the outcome of the decision, XRP’s technicals are hinting at a possible correction.
In particular, XRP has become an overbought asset compared to Bitcoin and the dollar.
Related: Total crypto market cap shows strength after consolidation and Federal Reserve rate hike
The XRP/BTC Relative Strength Index (RSI) reached close to 85 on September 23, above the overbought 70 threshold, ahead of a strong price correction or consolidation.
As shown in the chart below, XRP/BTC has corrected by about 10% from its 13-month high. The pair will now test 0.00002601 as its short-term support, which if broken to the downside could have 0.00002079 as its primary low target or a 20% decline from current levels by the end of the year.
Meanwhile, XRP saw a similar sharp correction to the dollar after breaking through several months of downtrend line resistance as shown below.
An extended pullback from trendline resistance could see XRP testing the recent horizontal trendline support as its next lower target. In other words, the XRP/USD pair could drop to $0.31 by the end of 2022, which is about 40% down from today’s price.
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