In a reversal of luck, Ripple’s XRP crashed drastically as investors responded to a lawsuit filed by the Securities and Exchange Commission (SEC) alleging the token was illegal security.
The U.S. Securities and Exchange Commission accused Ripple Labs and its two San Francisco executives of selling $ 1.3 billion in XRP in an unregistered public sale.
“We claim that Ripple, [Chris] Larsen and [Brad] Garlinghouse has failed to register its ongoing offer and sale of billions of XRP to retail investors, withholding adequate information from potential buyers about the business of XRP and Ripple, as well as other important long-term protections fundamental to our robust public market system. Stephanie Avakian said the director of the SEC’s enforcement division in a statement.
Even so, Brad Garlinghouse, CEO of Ripple, dismissed the SEC lawsuit, calling it “fundamentally wrong for legal and factual reasons.” He vowed to challenge the regulator in court. Unfortunately, his assurance did little to get XRP out of its free fall.
The cost of buying an XRP token fell by up to 37.94 percent due to the SEC fee. It did so when the total XRP long liquidations crossed the $ 36.5 million mark in the past 24 hours.
Meanwhile, XRP’s potential to register prolonged losses continued to rise after OSL, a Hong Kong-based trading platform, delisted its Ripple-oriented services. Some community members agreed that this could lead other exchanges to delist XRP as well.
Some thoughts on $ XRP
-Problems with the SEC = you are fucked
– The November pump supported by the air drop could be initiated by whales as a last chance to dump at high prices
– The first exchange that delisted $ XRP could lead to a chain reaction
-I’m done with $ XRP
-Chart looks awful pic.twitter.com/Dv4Bw3B7Ft
– Crypto $ Hannibal (@ c22_v1) December 23, 2020
This raised concerns about a long squeeze – a situation where investors who are long positions feel the need to sell in a falling market in order to reduce their losses.
XRP completely invalidated the Bull Flag indicator on a technical level after its strong upward rally last week. As shown in the chart below, the token has broken below the consolidation pattern to turn the crucial support at USD 0.33 into resistance.
The ripple token continues to eye the downward correction as the SEC-FUD grows. Source: XRPUSD on TradingView.com The Ripple Token will result in another downward correction as the SEC FUD grows. Source: XRPUSD on TradingView.com
Traders are now seeing an extended correction towards historical value levels. The first reading is $ 0.26, which served as resistance during the September-November consolidation period. Falling below the mirrored level would have the XRP price test USD 0.20 as a downside target.