XRP Price Plummets as SEC Targets the Ripple-Backed Cryptocurrency
XRP has seen some turbulent price action as of late, with the recent SPARK airdrop giving it massive momentum that sent its price as high as $0.90 on some exchanges, with this proving to be a sell the news event that has caused it to see some serious downside.
One black swan event that is now placing massive pressure on its price is a lawsuit that Ripple has received from the SEC regarding XRP being an unregistered security.
This has long been a concern for the company. They have spent millions on lawyer fees trying to distance themselves from the cryptocurrency, claiming that they did not create it but rather adopted the existing digital asset for use within their products.
This claim is widely disputed, however, and clearly did not convince the SEC. News regarding their lawsuit against the company sent XRP’s price plummeting below $0.50.
Surprisingly, it does appear to be finding some support around its current price levels, but there’s a strong possibility that as news spreads regarding what’s going on, more investors will jump ship out of fear.
XRP Price Declines Below $0.50 as Lawsuit Fears Mount
At the time of writing, XRP is trading down just over 7% at its current price of $0.47. This is around where its price has been trading throughout the morning.
Bulls did try to put up a defense of $0.50, but the fear surrounding this lawsuit’s potential outcome could cause its price to nuke lower in the near-term.
There has also been baseless speculation that Coinbase may delist XRP as it gears up for its initial public offering out of fears of allowing traders to buy and sell what could be unregistered securities.
Social Volume and Exchange Inflows for the Token Ramp Up
One analytics firm explained in a recent tweet that social volume for XRP is rocketing higher, with discussions surrounding the crypto’s potential status as an unregistered security spreading like wildfire on social media.
“As news broke about Ripple expecting to be sued by the SEC, social volume for XRP understandably exploded for crypto’s #3 market cap asset. There has also been an increase in tokens being moved to exchanges, as prices have dropped -17% the past day.”
Image Courtesy of Santiment.
The coming few days should shine a light on where XRP will trend in the mid-term.
The selling pressure seen in the time following the SEC lawsuit news hasn’t been as intense as many expected, but it may simply take some more time for the news to take hold of XRP’s price.
Featured image from Unsplash. Pricing data from TradingView.