Trade Of The Week: Ripple ready to create waves?

• Ripple waits on SEC response

• Crypto ↓ 12% year-to-date

• Rangebound on D1 timeframe

• Key levels of interest 0.5675, 0.5350 & 0.4750

• Breakout on the horizon?

Our focus falls on Ripple due to the legal drama with the US Securities and Exchange Commission (SEC).

This could be a big week for the crypto depending on how markets react to the SEC’s reply to the ongoing lawsuit.

But before we discuss how to take advantage of this opportunity, here are the basics:

What is Ripple?

Ripple is a money transfer network created to serve the needs of financial services.

XRPUSD is a tailored cryptocurrency to work on the Ripple network.

When was it created?

Ripple was founded in 2004 as Ripplepay but the first XRP ledger was launched in 2012.

Why should you care?

Ripple created the XRP token with the goal of solving a real-world problem with blockchain and Cryptocurrency.

Some fun facts about XRP:

• You can’t mine Ripple.

• The total supply of XRP is capped at 100 billion.

• Around 55 billion are in circulation.

• It’s down 12% year-to-date.

• Over 70% away from its all-time high.

The lowdown…

In December 2020, the SEC sued Ripple for selling digital tokens without registering the token.

Fast-forward to today, although these claims have been partially dismissed by the court – the SEC has asked that Ripple Labs be fined a whopping $2 billion.

This has evolved into an ongoing legal battle, creating much uncertainty over the outlook for Ripple.

The bigger picture

How this legal standoff between Ripple and SEC plays out could significantly impact Ripple’s outlook and market regulation in the wider crypto space.

The SEC must file a sealed reply brief by Monday 6th May and the redacted version (excluding sensitive information) for the public by Wednesday 8th May.

Note: In the lawsuit, the SEC proposed a $2billion fine but Ripple has countered with a much lower settlement of $10 million. 

What does this mean?

After over 3 years, the SEC vs Ripple saga could be coming to an end.

The next major step is for the court to decide on the financial penalty size with the final ruling expected between July and September 2024. 

A bright spot

Last month, Ripple announced plans to launch a stablecoin pegged 1:1 to the US dollar in 2024. 

Note: A stablecoin is a form of digital asset that can be used to make payments. 

Should this become a reality, it could boost the utility of XRP – potentially leading to higher prices. Last Friday, Ripple’s CTO David Schwartz announced that more information about the stablecoin will be presented in mid-June.

Focusing on this week…

It’s all about the SEC’s reply to the ongoing lawsuit:

• A favorable response from the SEC may reduce the odds of a hefty fine – potentially boosting XRP.

• If the SEC presses on with the $2 billion fine and the court case drags on, this could hit XRP.

Looking at the technical…

XRPUSD remains choppy on the daily charts with bulls and bears locked in a fierce tug-of-war.

Support can be found at 0.4750 while resistance is at 0.6650. Still, prices seem to be pushing higher after creating a 2024 low at 0.4059 back in mid-April. However, prices are trading below the 50, 100, and 200-day SMA. 

• A solid breakout and daily close above 0.5675 could inspire a move toward the 200-day SMA and 0.6650.

• Should prices slip back below 0.5350 could trigger a decline towards 0.4750.