The lawsuit filed by SEC against Ripple and its two executives – Chris Larsen and Brad Garlinghouse – is the most trending topic right now. It superseded Michael Saylor’s bitcoin bags, the institutions buying more bitcoin, etc.; in fact, many mainstream media covered this news.
As the news broke out, price of XRP started dropping. At the time of writing, XRP was up 39.7% in the last 24 hours and had lost its position as the third-largest cryptocurrency in the world by market cap.
The lawsuit against Ripple is due to the fact that SEC considers XRP as a security, and what Ripple has done since 2013 is “selling unregistered securities”, which is a punishable offense.
Without getting into the details, here are a few scenarios of what might lie ahead of us.
At press time, it is hard to judge who will end up victorious. However, companies related to Ripple or XRP will be in trouble in the present scenario. Bitwise and many such companies have already steered clear of XRP. Depending on the direction the lawsuit goes, users/companies might either warm up to XRP again or just cut it loose forever.
As seen in the chart above, the worst is over as the price has tapped the 0.786-Fibonacci level. Perhaps, in the short-term, we can expect it to tread this level undecidedly until more news is revealed.
Based on this development, the price might either head higher or go lower. In the short term, we can expect XRP to hit its 2020 low if things get bad for Ripple or XRP.