Ripple (XRP) Surges 10% as SEC Drops Lawsuit

Ripple (XRP) experienced a significant price surge on Wednesday, climbing 10% to reach $2.59. This rally was triggered by the news that the U.S. Securities and Exchange Commission (SEC) had officially dropped its lawsuit against Ripple. The announcement was confirmed by Ripple CEO Brad Garlinghouse, who expressed relief and optimism in a video address. Garlinghouse emphasized that the SEC’s decision to drop the case represents a victory not just for Ripple, but for the broader cryptocurrency industry. He criticized the SEC’s enforcement approach, arguing that the lawsuit had created unnecessary uncertainty for investors and blockchain innovators.

The lawsuit, originally filed in December 2020, alleged that Ripple had conducted an unregistered securities offering by selling XRP tokens. Throughout the case, Ripple maintained that XRP should not be classified as a security, pointing to its decentralized nature and practical utility in cross-border payments. A landmark ruling in July 2023 had already determined that XRP sales on secondary markets did not constitute securities transactions, dealing a significant blow to the SEC’s case. With the dismissal of all remaining charges, Ripple can now focus on expanding its business operations and fostering new collaborations in the financial sector. Market watchers expect increased engagement from institutional investors, who had previously been hesitant to engage with XRP due to the bearish overhang of the SEC litigation.

While the lawsuit’s dismissal has fueled a bullish narrative, rising leverage in the derivatives market has introduced potential risks. The sharp rise in leveraged trading suggests growing investor confidence but also heightens the risk of liquidation if price momentum falters. A deeper dive into exchange-specific data reveals a significant tilt toward long positions, signaling heavy bullish sentiment in the market. However, the growing leverage poses a risk of liquidation. Data shows that in the past 12 hours, a significant amount of positions were liquidated, with a majority coming from long positions. If XRP fails to maintain support above $2.50, cascading liquidations could drive sharp price swings, triggering a potential retracement. Conversely, if the price consolidates above this critical level, the rally could extend toward $2.70 and beyond.

XRP price action remains bullish following the SEC lawsuit resolution, with technical indicators suggesting further upside potential if key support levels hold. Currently trading at $2.4917, XRP is testing the $2.50 psychological level, which coincides with the middle Bollinger Band. A daily close above this level would solidify bullish momentum and set the stage for a potential continuation toward the upper Bollinger Band. The Relative Strength Index (RSI) sits at 53.67, indicating mild bullish momentum. A move above 60 would signal strong buying pressure, potentially fueling an extension toward $2.70 and beyond. Additionally, trading volume remains elevated, reinforcing investor interest. However, if bulls fail to defend the $2.50 level, a retracement toward the lower Bollinger Band could materialize, with further downside risk if momentum weakens.

While the 30.27% rally over the past four days highlights bullish strength, XRP remains vulnerable to profit-taking. A failure to close above $2.50 may result in short-term consolidation or a pullback. However, a confirmed breakout could trigger another leg up, positioning XRP for a challenge of the $3.00 psychological resistance in the coming weeks. The conclusion of the lawsuit has had an immediate and positive impact on XRP’s market performance. Following the announcement, XRP’s price surged by 13%, reaching nearly $2.56. Notably, Bitcoin (BTC) price also experienced a 2.2% increase, climbing to $84,096, while Ethereum saw a 6.6% rise, reaching $2,031. These movements suggest that the resolution of Ripple’s legal squable with the US regulator has had a positive ripple effect across the broader crypto markets.