XRP price posted a strong rally against Bitcoin (BTC) on continued optimism about a potential deal between Ripple, a San Francisco-based blockchain payments firm, and the United States Securities and Exchange Commission (SEC). .
Liquidation Rumors Fuel XRP Price Boom
The 23th of September, the XRP/BTC pair soared to 0.00002877 – its best level in 13 months – from 0.00002132, a 35% price rally against Bitcoin in one day. Meanwhile, in the same timeframe, XRP is up as much as 42% against the US dollar.
Large price jumps in the XRP market began to appear after Ripple and the SEC filed motions for summary judgment in court on September 12 in connection with their ongoing legal battle over allegations that Ripple committed fraud. values.
In other words, Ripple and the SEC agreed that the court should use available evidence to reach a verdict on whether the blockchain firm illegally raised funds through the sale of XRP by December 2022, thus avoiding a trial.
The price of XRP has soared roughly 75% and 60% against Bitcoin and the dollar, respectively, since Ripple’s court filing, fueled by optimism of a possible Ripple victory.
The buying was further accelerated after Ripple CEO Brad Garlinghouse suggested the same thing in his recent interview with Fox Business on Sept. 22.
— HeadlineHunter!US (@HHunter_US) September 22, 2022
“People realize that the SEC is really overstepping its bounds and they’re not following true allegiance to the law in pursuit of an outcome.” […] The SEC has lost its way.”
Sharks and whales XRP buying since 2020
The price rise also comes amid consistent accumulation of XRP tokens by wealthy investors since May.
The percentage of entities holding between 1 million and 10 million XRP tokens – known as sharks and whales – has risen as a whole to 6.35% on September 23, 2022, up from 5.43% on December 31, 2020, according to data from Santiment, which noted:
“Active shark and whale addresses holding 1 million to 10 million $XRP have been in an accumulation pattern since late 2020.”
In the meantime, the given period also witnessed entities with over 10 million XRP tokens reaching an all-time low of 70.75% of current supply.
It appears that traders have been buying the buzz in the lead up to Ripple’s verdict against the SEC. But while it remains to be seen if this will then become “sell the news”, depending on the outcome of the bug, the technicals of XRP are hinting at a possible correction.
In particular, XRP has already become an overbought asset against Bitcoin and the dollar.
The Relative Strength Index (RSI) for XRP/BTC reached almost 85 on Sep 23, well above the 70 overbought threshold that usually precedes a strong price correction or consolidation.
The XRP/BTC pair has already corrected almost 10% from its 13-month high, as shown in the chart below.. The pair is now testing 0.00002601 as its short-term support, which, if broken lower, could see it test 0.00002079 as its main downside target or a 20% drop from current levels by the end of the year.
Meanwhile, XRP sees a similar strong correction against the dollar after crossing paths with multi-month descending trendline resistance, as shown below.
A prolonged pullback from trendline resistance could see XRP test its short-term horizontal trendline support as its next downside target. In other words, the XRP/USD pair could drop to $0.31 by the end of 2022, which would be almost a 40% drop from the price on September 23.
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