XRP Price Drops 8% to $2.30 as Ripple Battles SEC; What’s Next for Traders This Week?

XRP’s price experienced a significant decline of 8% over the weekend, settling at approximately $2.29 on March 16. A recent spike in optimism surrounding Ripple’s ongoing legal disputes with the U.S. Securities and Exchange Commission (SEC) had briefly propelled the cryptocurrency to new heights leading up to this dip. As Ripple continues to navigate this complicated legal landscape, industry analysts speculate on the potential future movements of XRP throughout the coming week.

The previous week had positioned Ripple (XRP) as a distinguished performer in the market, buoyed by renewed hope regarding its legal challenges against the SEC. A report from FOX analysts suggested that the SEC was considering recognizing XRP as a commodity rather than a security. This reclassification could pave the way for XRP’s inclusion in exchange-traded funds (ETFs), which has been a significant point of contention in the cryptocurrency space. The SEC appears to be using Ethereum’s current regulatory status as a framework for these discussions, making Ripple’s future prospects intriguing to investors.

However, the momentum shifted drastically when, on March 14, the SEC decided to suspend its approval process for altcoin ETFs. This announcement had a ripple effect, leading to a downturn in the market and abruptly interrupting XRP’s performance after four consecutive days of gains. By March 16, Ripple’s price had dropped from its previous high of $2.49 to $2.29.

Despite this recent downturn, the derivatives market indicates that bullish sentiment may persist. Data from Coinglass suggests that XRP’s trading volume has risen by approximately 12%, now at around $6.05 billion, signaling robust market activity amid the pullback. Additionally, the 24-hour liquidations reveal that approximately $11.78 million were liquidated in total, including about $9.05 million in long positions and $2.73 million in short positions. This data suggests that while long positions were adversely affected during the price drop, traders maintaining short positions may soon face pressure as market conditions stabilize.

Furthermore, XRP’s open interest has decreased by about 6.70% to $3.14 billion, indicating a trend of unwinding leveraged positions. This phenomenon could mark the end of the ongoing price correction, nurturing the potential for another bullish trend if market demand increases. The existing indicators demonstrate that traders are strategically positioning themselves for a rebound. Should regulatory uncertainties diminish and overall market sentiment improve, XRP may reclaim its bullish trajectory in the forthcoming days.

As the market adjusts to this shifting backdrop, traders are advised to monitor vital events that could influence XRP’s price action in the week ahead:

1. Ripple’s Trademark Filing: Ripple has recently submitted a trademark application for “RIPPLE CUSTODY,” hinting at an upcoming product aimed at enhancing cryptocurrency storage solutions. This development may attract renewed investor interest, as Ripple prepares to capitalize on international partnerships and potentially launches innovative products after years of litigation.

2. Federal Reserve Meeting on February 19: The forthcoming Federal Reserve meeting will significantly impact market sentiment. Any indications of a more lenient monetary policy could encourage increased risk appetite among investors, which would likely benefit XRP and other digital assets.

3. SEC Developments on ETF Approvals: The SEC’s temporary halt on altcoin ETF approvals is anticipated to generate ongoing discussions within the industry. Investors will closely monitor remarks and insights from key ETF sponsors in the coming weeks as they rely on forward-looking guidance.

Looking ahead, XRP’s price forecast is cautiously optimistic, with emphasis on an anticipated recovery in the wider cryptocurrency market. Technical analysis indicates the potential for an upward movement, with the Keltner Channel’s midline at approximately $2.35 serving as a critical resistance level. Should XRP break above this threshold, it may experience upward momentum towards the upper channel band, which is located near $2.78.

Despite the recent downturn of 8.38% within a single session, volume data indicates that a healthy recovery remains plausible, particularly as prior bullish activity recorded volumes exceeding 1.3 billion. If XRP can maintain support around the $2.30 level, bullish traders could regain control, propelling prices towards the $2.50 mark in the near term and possibly aiming for a rebound to $2.80 thereafter.

Conversely, a failure to hold at $2.30 could signal deeper retracements, potentially challenging lower support levels around $1.95. However, given XRP’s recent resilience and trading volume patterns, current market dynamics suggest a bullish scenario is more favorable.