XRP rallies as Ripple tests stablecoin, optimism on SEC lawsuit ruling

VaselineAugust 12, 2024

0 3 minutes read

XRP rallies as Ripple tests stablecoin, optimism on SEC lawsuit ruling

Ripple RLUSD stablecoin testing begins on Ethereum mainnet and XRP Ledger.
Ripple Chief Legal Officer Stuart Alderoty comments on the SEC’s appeal and final ruling in the lawsuit.
XRP adds 3% on the day, eyeing a return to the psychologically important $0.60 level.

Ripple (XRP) bounces back on Monday, nearly erasing Sunday’s losses, as the payments remittance firm begins testing the Ripple USD (RLUSD) stablecoin on the Ethereum mainnet and XRP Ledger. Ripple is awaiting regulatory approval for its stablecoin, so RLUSD is currently in private beta.

The token’s gains came after Ripple’s Chief Legal Officer (CLO) Stuart Alderoty commented on the firm’s recent lawsuit ruling with the US Securities & Exchange Commission (SEC) on whether an appeal by the authority is likely regulation.

XRP is trading at $0.5726 at the time of writing.

Daily Digest Market Movers: Ripple tests stablecoin, CLO comments on SEC process

The Ripple stablecoin is in private beta, and the payment remittance firm has begun testing the asset on the Ethereum mainnet and the XRP Ledger. The firm informed in an official tweet on X that the stablecoin project has not yet received regulatory approval and RLUSD is not available for purchase or trading.

Testing, testing… RLUSD! We are excited to tell you that Ripple USD (RLUSD) is now in private beta on the XRP Ledger and the Ethereum mainnet. RLUSD has not yet received regulatory approval and is therefore not available for purchase or trading – please beware of scammers claiming to…

— Ripple (@Ripple) August 9, 2024

XRP holders and traders digested the news of the SEC ruling vs. Ripple, where the judge fined the company $125 million for violating federal securities laws. The judge ruled Ripple’s sale of XRP to institutions a violation of the law.

There was no comment or reference to the July 2023 XRP ruling, in which the altcoin gained legal clarity as a non-security on secondary markets or exchanges.

Both sides saw the final verdict as their win, as the fine was twelve times what Ripple proposed (making it favorable to the SEC, as Ripple was willing to pay $10 million and the fine was 125 of millions of dollars). Ripple considers it favorable because XRP legal clarity remained intact and the fine was reduced from the SEC demand of more than $2 billion.

It remains to be seen whether the financial regulator will challenge the final verdict or XRP’s security status.

Stuart Alderoty, Ripple’s CLO, said in an interview with CNBC that the SEC has sixty days to decide whether to appeal the lawsuit’s decision.

Technical Analysis: XRP Sees 3% Gains.

Ripple, which is trading at $0.5734 at the time of writing, has been in a downtrend for several months. . If Monday’s momentum holds, XRP could rally towards $0.6217, extending its 8.57% gains to the July 31 low. However, to reach this target, the altcoin faces resistance at $0.60, a psychologically important level for Ripple.

Looking to the downside, Ripple could find support in the Fair Value Gap (FVG) between $0.5188 and $0.5785, the upper and lower limits of the disequilibrium zone.

The MACD (Moving Average Convergence Divergence) indicator shows an underlying negative momentum in the altcoin price trend.

XRP/USDT Daily Chart

A daily candlestick close below $0.5785 could invalidate the bullish thesis for the altcoin. In the event of a correction, XRP could sweep liquidity into FVG.

Frequently asked questions about Bitcoin, altcoins, stablecoins

Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any person, group or entity, which eliminates the need for third parties to participate during financial transactions.

Altcoins are any cryptocurrency other than Bitcoin, but some consider Ethereum to be a non-altcoin because it is from these two cryptocurrencies that the fork occurs. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and therefore an “improved” version of it.

Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset they represent. To achieve this, the value of any stablecoin is tied to a commodity or financial instrument, such as the US dollar (USD), with its supply regulated by an algorithm or demand. The main purpose of stablecoins is to provide an on/off ramp for investors who want to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value, as cryptocurrencies in general are subject to volatility.

Bitcoin dominance is the ratio of Bitcoin’s market cap to the total market cap of all cryptocurrencies combined. It provides a clear picture of Bitcoin interest among investors. A high dominance of BTC usually occurs before and during a bull run, where investors resort to investing in relatively stable and high market capitalization cryptocurrencies such as Bitcoin. A decline in BTC dominance usually means that investors move their capital and/or profits to altcoins in search of higher returns, which usually triggers a burst of altcoin rallies.