XRP price went ballistic on Thursday after a US Judge ruled that it is not security when sold on exchanges. The Ripple Labs token rallied 101% from yesterday’s opening at $0.471 to set a swing high at $0.947.
At the time of writing, XRP had pulled back to $0.769, up 67% in the last 24 hours. With a market capitalization of $41.4 billion, XRP has reclaimed its position as the third largest non-stablecoin cryptocurrency on the CoinMarketCap ranking.
Other tokens which had been listed as securities by the US Securities and Exchange Commission (SEC) in the lawsuits it brought against Binance and Coinbase last month also displayed stark bullishness after the summary judgment by Judge Analisa Torres.
Cardano (ADA), Solana (SOL) and Polygon (MATIC) have all rallied recording 25%, 32%, and 18% gains over the last 24 hours respectively.
Ripple Labs and SEC share joint victory
New York District Judge Analisa Torres ruled that Ripple’s XRP is not a security when sold to the general public, denying the SEC’s motion that it is. The judge, however, determined that institutional sales of XRP could be classed as securities. The ruling marked a partial win for the regulator and a clear win for XRP holders.
In her summary judgment, Judge Analisa Torres articulated a clear distinction between token sales on exchanges versus launch pads. According to the judge, a token only passes as a security when sold to institutional investors.
An excerpt from the summary judgment reads:
“Therefore, having considered the economic reality and totality of circumstances surrounding the Institutional Sales, the court concludes that Ripple’s Institutional Sales of XRP constituted the unregistered offer and sale of investment contracts in violation of Section 5 of the Securities Act. ”
A deep dive into the court’s decision highlights one key insight: XRP’s programmatic sale on exchanges did not meet the third prong of the Howey test. This segment of the test “examines whether the economic reality surrounding Ripple’s institutional sales led the institutional buyers to have a reasonable expectation of profits to be derived from the entrepreneurial or managerial efforts of others.”
This means, selling XRP on exchanges does not break securities law unless sold through an order book.
The ruling is considered a landmark decision that could have massive implications for the industry.
XRP holders elated as the race to $1 gears up
Ripple (XRP) price is on course toward $1, rising to as high as $0.945 as traders buy the news of XRP not being a security. Accordingly, the international remittance token has recorded the largest trading volume in the last 24 hours rising a whopping 1726% to $13.25 billion at press time.
The simple moving averages (SMAs) were facing upwards and the Relative Strength Index (RSI) was moving in the positive region. The price strength at 79 suggested that there was still more room for the upside before this oscillating indicator reaches 100.
As such, XRP could turn up from the current level, rising above the $0.80 psychological level to revisit the $0.845 level, embraced by the 78.6% Fibonacci retracement level. Above that, XRP could move higher toward $0.9 before returning to yesterday’s high at $0.947.
Overcoming this seller congestion zone would set XRP on the path for another rally with the first line of resistance arising from the 123.6% retracement level at $1.06, levels last seen in November 2021.
XRP/USD Daily Chart
On the other hand, if the sellers become more aggressive and take more profits at current levels, XRP may drop below the immediate support provided by the 61.8% extension level at $0.765 toward the 50% Fibonacci level at $0.71.
Breaching this support would extend the correction below the $0.60 psychological level toward the 23.6% retracement level at $0.58 before making the full retracement toward yesterday’s opening at $0.471.
