- Ripple whales sell over 200 million XRP tokens in July, while retail investors and whales in other cohorts accumulate.
- XRP rallied 23% in the past seven days, the altcoin erased recent gains as traders engaged in profit-taking.
- XRP trades around $0.5600 at the time of writing.
Ripple (XRP) trades around $0.5600, erasing recent gains on Friday. XRP token holders have consistently realized gains on their holdings in the past week, increasing the selling pressure on the altcoin and prompting a correction.
On-chain data and whale activity shows a change in the supply distribution, larger cohort of whales are distributing their XRP, while smaller cohorts accumulate.
Daily Digest Market Movers: Ripple whales sell over 200 million XRP
- Santiment data shows Ripple’s large wallet investors holding upwards of 100 million XRP in their wallets have sold over 200 million tokens in July 2024.
- In the same timeframe, Ripple wallet addresses in other cohorts, holding between 100,000 and 100 million XRP have accumulated XRP, as seen in the chart below.
- Typically, accumulation is a bullish sign for XRP. While the largest whale cohort is shedding their holdings, smaller cohorts are accumulating, likely anticipating a recovery in the future.
XRP address cohorts and supply distribution vs. price
- The US Securities and Exchange Commission (SEC) vs. Ripple lawsuit has no new update from either side. XRP traders are watching the lawsuit closely for a final ruling. Attorney Fred Rispoli predicted the end of the SEC vs. Ripple lawsuit in July 2024.
- As of Friday, July 19, profit-taking by investors grinds to a halt. The Network Realized Profit/Loss metric, used to determine the net profit/loss of traders, shows XRP traders realized nearly $500,000 in losses on the day.
Network Realized Profit/Loss vs. price
Technical analysis: XRP could extend losses by 15%
Ripple suffered a decline, XRP corrected to $0.54 low, early on Friday. The altcoin erased recent gains and is likely to extend losses by nearly 15% and sweep liquidity in the Fair Value Gap (FVG) between $0.5136 and $0.4780.
Once Ripple sweeps liquidity in this FVG, a return to $0.6058 is likely. This represents the 61.8% Fibonacci retracement of the decline from the March 12 top of $0.7696 and the July 5 low of $0.3823.
XRP/USDT daily chart
Ripple could find support at $0.5205, the 38.2% Fibonacci retracement of the decline from March 12 to July 5.
SEC vs Ripple lawsuit FAQs
It depends on the transaction, according to a court ruling released on July 14: For institutional investors or over-the-counter sales, XRP is a security. For retail investors who bought the token via programmatic sales on exchanges, on-demand liquidity services and other platforms, XRP is not a security.
The United States Securities & Exchange Commission (SEC) accused Ripple and its executives of raising more than $1.3 billion through an unregistered asset offering of the XRP token. While the judge ruled that programmatic sales aren’t considered securities, sales of XRP tokens to institutional investors are indeed investment contracts. In this last case, Ripple did breach the US securities law and will need to keep litigating over the around $729 million it received under written contracts.
The ruling offers a partial win for both Ripple and the SEC, depending on what one looks at. Ripple gets a big win over the fact that programmatic sales aren’t considered securities, and this could bode well for the broader crypto sector as most of the assets eyed by the SEC’s crackdown are handled by decentralized entities that sold their tokens mostly to retail investors via exchange platforms, experts say. Still, the ruling doesn’t help much to answer the key question of what makes a digital asset a security, so it isn’t clear yet if this lawsuit will set precedent for other open cases that affect dozens of digital assets. Topics such as which is the right degree of decentralization to avoid the “security” label or where to draw the line between institutional and programmatic sales are likely to persist.
The SEC has stepped up its enforcement actions toward the blockchain and digital assets industry, filing charges against platforms such as Coinbase or Binance for allegedly violating the US Securities law. The SEC claims that the majority of crypto assets are securities and thus subject to strict regulation. While defendants can use parts of Ripple’s ruling in their favor, the SEC can also find reasons in it to keep its current strategy of regulation by enforcement.
The court decision is a partial summary judgment. The ruling can be appealed once a final judgment is issued or if the judge allows it before then. The case is in a pretrial phase, in which both Ripple and the SEC still have the chance to settle.
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