Why is XRP price down today?
XRP price is down today, like other top crypto assets, as traders digest the most recent comments from the Federal Reserve.
XRP (XRP) price is down today, mirroring trends elsewhere in the cryptocurrency market as traders digest the most recent comments from the Federal Reserve.
XRP’s XRP token has been facing persistent pressure since July 20, when it hit its highest point since April 2022, driven by optimistic expectations arising from Judge Analisa Torres’ ruling that portions of the token sale were not a securities issuance. The judge’s decision stated that secondary sales of XRP do not count as an investment contract, a crucial aspect of the U.S. Securities and Exchange Commission’s (SEC) accusation.
Despite this positive boost, the upward momentum that propelled XRP price to $0.83 quickly reversed. Investors realized that the ruling might eventually be overturned in higher courts. It became apparent that the decision only exempted Ripple and its founders from selling through exchanges or engaging directly with institutional investors.
Shortly after, on July 31, Judge Jed Rakoff from the Southern District Court of New York rejected Terraform Labs’ attempt to dismiss a lawsuit filed by the SEC. This rejection also overturned the prior decision made by U.S. District Judge Analisa Torres, who had ruled that Ripple’s sale of XRP tokens on public exchanges did not violate securities laws.
In the subsequent five days, XRP underwent an 11.3% price correction, dropping to $0.63. This reflected the deteriorating regulatory environment and reduced investor interest in holding XRP. Furthermore, other recent events have intensified investor concerns, causing an additional 6% decline in XRP’s price between August 14 and August 16.
Potential appeal from the SEC
While the SEC has submitted an interlocutory brief to officially express its plan to challenge Judge Analisa Torres’ decisionl, Stuart Alderoty, Ripple’s Chief Legal Officer, argued that the SEC is not currently entitled to appeal. This is why they are seeking permission for an appeal, and Ripple is anticipated to provide its response to the Court in the upcoming week.
During a recent discussion on Tony Edward’s Thinking Crypto Podcast, James Seyffart, an exchange-traded fund (ETF) analyst at Bloomberg, explained that the listing of XRP futures on the CME, which he believes is unlikely to happen in the near future, would need to occur before a potential ETF launch. Consequently, the analyst dampened expectations for a XRP spot ETF to become a reality.
Related: XRP price can fall 40% by September — Fractal analysis
Macroeconomic uncertainty weighs on XRP’s performance
Taking a broader view, it could be argued that investors are displaying a higher degree of caution. This shift could be attributed to the outcomes of the U.S. Federal Reserve’s strategies aimed at curbing inflation, which are beginning to impact the economy by causing increased financing costs. Notably, investor Kevin O’Leary has observed a slowdown in lending and a rise in borrowing costs for small businesses. He has also pointed out emerging vulnerabilities in regional banks.
O’Leary further suggests that the Fed may continue raising interest rates due to the persistent presence of inflationary pressures. He specifically raises questions about the potential impact of the spending associated with the Inflation Reduction Act and the CHIPS Act. O’Leary highlights that a substantial sum of money, nearly a trillion dollars, remains unutilized. “That money has not been deployed yet, Larry, that’s close to a trillion dollars,” O’Leary stated.
Given these circumstances, and considering Ripple and the XRP token are grappling with their own issues in an environment that’s not conducive to risk-on assets, the likelihood of further price correction becomes more pronounced. Thus, a retest of the $0.54 level, which acted as resistance in June 2023, appears quite possible.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
