Ripple vs SEC: Upcoming Meeting Fuels Settlement Speculation and XRP Price Volatility

Key Takeaways

• Speculation grows on potential Ripple case settlement by July 25 before meeting with SEC.
• The SEC seeks a $2 billion penalty; Ripple has countered with a $10 million proposal.
• The XRP price could rise to $0.94 or fall to $0.35.

Speculation surrounding the Ripple case has intensified as investors watch the U.S. Securities and Exchange Commission’s (SEC) closed meeting  on July 25, which features a potential settlement as a key discussion topic.

Despite high expectations, XRP’s price movement suggests that investors are exercising caution, as the settlement terms could significantly impact the asset’s short-term trends.

SEC vs. Ripple

The SEC has proposed a $2 billion penalty and an injunction against XRP sales to institutional investors, alleging that Ripple continued to violate securities laws even after the complaint was filed. In contrast, Ripple has countered with a proposal for a $10 million penalty, arguing that it has complied with securities laws since the regulator filed the complaint.

The SEC has suggested a minimum penalty of $102.6 million. However, Ripple disputes this amount, claiming that its post-complaint activities involved sales of XRP to accredited investors and on-demand liquidity (ODL) agreements, which are exempt from securities laws. Furthermore, Ripple argues that XRP holders who participate in ODL agreements cannot expect to profit from their holdings, which means that the arrangement does not meet the third prong of the Howey Test.

Additionally, Ripple has addressed the SEC’s concerns about its plans to issue a stablecoin, which the SEC criticized as an unregistered asset issuance. A favorable settlement could increase demand for XRP, potentially driving its price above $1. Moreover, a settlement could clarify the classification of Ripple’s stablecoin, which the SEC has questioned. If it is confirmed that the stablecoin is not a security, this would be a positive development for Ripple.

XRP Price Analysis 

Ripple’s price experienced a notable decline on July 5, reaching a low of $0.38, the lowest since March. However, this was followed by a significant recovery, with XRP surging by 67.50% to a high of $0.63 on July 17. The price then dropped by 15% to $0.54 on July 19 before rebounding to $0.62 on July 25, where it interacted with its descending resistance line.

Since its peak at $0.93 in mid-July last year, Ripple has been in a sustained downtrend, forming a descending channel. The recent low coincided with the channel’s support, while the high on July 24 reached the resistance level. Although the price remains within the downward trend, the momentum behind the recent rise suggests a potential reversal.

To confirm the start of an uptrend, a higher low and support above the 0.618 Fibonacci retracement level at $0.48 are required. If achieved, XRP could rise to $0.94. Conversely, if the decline continues below $0.48, XRP may face further downside, potentially reaching the next horizontal support at $0.35. A second confirmation is necessary to determine the direction of the trend, as the price was rejected at the descending resistance.