- Ripple remains in the middle of a $1.3 billion lawsuit with the U.S. SEC.
- XRP price volatility since December 2020 has been a challenge for investors.
- The cryptocurrency continues printing higher lows since the beginning of 2021 while momentum builds up for another leg up.
In December 2020, the U.S. Securities and Exchange Commission charged Ripple and key executives of violating securities laws in the sale of XRP tokens since 2013. Ripple has filed separate motions for the case to be dismissed, arguing on the grounds that the Treasury Department’s Financial Crimes Enforcement Network had previously classified XRP as a virtual currency.
Even though the lawsuit is ongoing, Ripple moves forward with the business, particularly in Asia, where it has a joint venture with the Japanese conglomerate SBI Holdings. Moreover, Ripple may even consider a move outside the U.S. if the regulatory environment doesn’t improve.
XRP price shrugs off uncertainty while it consolidates
From October 2019 to November 2020, XRP shaped a clear head-and-shoulders pattern with a bullish volume profile. In November 2020, the neckline was broken with two powerful up weeks on increasing volume before XRP price hit resistance at the $0.70 level. The upswing also confirmed the July 2020 breakout above the 2018 descending trendline.
Since the beginning of 2021, XRP price has defined a potential triangle with clear resistance above $0.70.
This resistance level dates back to September 2018, which intersects with the top of the triangle formation. The volume profile is mildly tilted towards distribution, but volume declined notably over the last two weeks shows that selling may be exhausted.
XRP/USD daily chart
The notable decline in December 2020 reflected nervousness among investors. Still, the quick rebound from the support of the 2018 descending trendline highlights the fact that the lawsuit has not changed the positive medium-term outlook.
The current price action appears to be more of a consolidation process as XRP releases the rapid moves’ price compression. A clear weekly close above $0.70 will be the first to tell that the consolidation process within the triangle is complete and will raise the odds that the currency resumes the rally to $1.20.
On the downside, a weekly close below the rising trendline from the December 2020 low would leave the XRP exposed to a quick decline to $0.30.
Share
