XRP has seen some incredibly bearish price action as of late, with the selling pressure seen over the past 48 hours coming about due to news surrounding the SEC’s lawsuit against Ripple – the San Francisco-based FinTech startup that is closely tied to the cryptocurrency.
The lawsuit claims that XRP is an unregistered securities product that the company has used as a fundraising mechanism and details the company’s previous quarterly token dumps that have been widely viewed as the main reason why its price was so flat over a multi-year period.
Where the cryptocurrency trend next will likely depend on its reaction to a key support level, which appears to be on the cusp of being broken.
One trader believes that an imminent break below this level could lead to an intense downtrend that sends its price down towards $0.20.
Some major funds like Bitwise have even liquidated their XRP positions, and there is a growing possibility that exchanges like Coinbase will also delist the cryptocurrency in the days and weeks ahead.
This could create true panic selling that sends its price cratering to new multi-year lows.
XRP Price Crashes as SEC Woes Rock Investors
XRP had been on a massive run before the SPARK airdrop, with its price reaching highs of $0.90 on Coinbase and other exchanges before it lost all its momentum and plunged towards $0.60.
It consolidated here for a while before the SEC news hit, which sent the cryptocurrency’s price tanking down to lows of $0.30 that were set overnight.
It is now trying to hold above this level at its current price of $0.31. It is unlikely that it will find any major buy-side support in the near-term, however.
Analyst: $0.20 a Likely Target for the Embattled Token
Because the buy-side pressure is dwindling, there’s a strong possibility that it will see further near-term downside in the days to come.
“XRP – 30 cents is a critical level that needs to hold otherwise I think this drops to 20 cents – 2020 yearly open. No position in XRP – not interested unless it drops much lower.”
Image Courtesy of TraderXO. Source: XRPUSD on TradingView.
The coming few days should shed some light on XRP’s technical fate, as a wave of exchange delistings coupled with endless sell-side pressure could cause it to set multi-year lows.
Featured image from Unsplash. Charts from TradingView.