Will XRP price defend the $0.5 support if the SEC decides to appeal?

XRP price fell 2.62% to $0.56 on Sunday as cryptocurrencies came under renewed selling pressure. The falling price marks a notable reversal within the multi-year triangle pattern and signals the potential for a larger correction. Will the bearish plan get even stronger as some reports suggest that the U.S. Securities and Exchange Commission (SEC) may decide to appeal certain aspects of the final ruling?

Ripple faces appeal to SEC despite $12.5 million fine

The XRP coin has recently caught the attention of crypto investors following a favorable final ruling in the Ripple vs. SEC case. On August 7, Judge Torres imposed a penalty of $12.5 million on Ripple, far less than the SEC’s initial demand of $2 billion.

While the XRP community celebrated this as a major success, discussions arose about the possibility of an appeal by the U.S. Securities and Exchange Commission (SEC), particularly regarding Ripple’s On-Demand Liquidity (ODL) sales.

However, attorney Jeremy Hogan explains that the injunction on Ripple’s On-Demand Liquidity (ODL) sales is unlikely to change the status quo. He stresses that most XRP and ODL sales are outside of U.S. jurisdiction. Ripple can continue to sell XRP to institutions under certain exceptions, and the SEC will have to prove any violation to enforce the injunction.

I see a lot of questions about what the injunction means for ODL sales. I see NO difference from the status quo for the following reasons:

1. As Ripple has explained, the majority of its XRP and ODL sales occur outside of the US jurisdiction and are not subject to the ruling. This… pic.twitter.com/3GimWEcp0c

– Jeremy Hogan (@attorneyjeremy1) 7 August 2024

Hogan also mentions that Ripple’s legal team had ample time to adjust its procedures to comply with the summary judgment.

XRP price hints at major reversal within triangle pattern

The daily XRP price chart shows a notable reversal from $0.64 as the mid-week recovery fades. The bearish turn sent the asset crashing 11.5% to $0.56 while the market cap plummeted to $31.9 billion.

Interestingly, this reversal marked another bear cycle within the triangle pattern that has been intact since September 2021. This chart pattern consists of two converging trend lines: dynamic resistance and support that drive prices into a tight range before a major breakout.

Data from Coinglass shows that XRP’s open interest (OI)-weighted funding rate is -0.0085. This negative rate shows that short sellers are paying to hold their positions, implying expectations of further price declines.

Therefore, the recent reversal and the expected SEC appeal against Ripple’s ODL sale could accelerate the bearish sentiment for XRP. If the selling continues, the altcoin could break the combined support of $0.55 and the 200-day EMA and favor a decline to the psychological mark of $0.4.

The $0.4 level, backed by the triangle pattern support, is a key accumulation zone for dip buyers. A possible rebound from this low could renew the recovery momentum for the next bounce.

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Sahil Mahadik

Sahil is a dedicated full-time trader with over three years of experience in the financial markets. Equipped with a strong understanding of technical analysis, he keeps an eye on the daily price movements of major assets and indices. Attracted by his fascination with financial instruments, Sahil has enthusiastically turned to the emerging space of cryptocurrencies, where he continues to explore opportunities fueled by his passion for trading.

Disclaimer: The content presented may contain the personal opinion of the author and is subject to market conditions. Conduct market research before investing in cryptocurrencies. The author or publication assumes no responsibility for your personal financial loss.