XRP has experienced a significant price drop today, falling by approximately 12.75% over the past 24 hours, hitting a monthly low of $0.511 on October 3. The price decline can be attributed to the SEC’s appeal in the Ripple lawsuit, coupled with increasing geopolitical tensions in the Middle East that are influencing investor sentiment and broader market trends.
Impact of SEC Appeal on XRP
On October 2, the U.S. Securities and Exchange Commission (SEC) officially filed an appeal in the Ripple lawsuit, challenging a previous court ruling by Judge Analisa Torres. Earlier in 2023, Judge Torres ruled that secondary sales of XRP do not constitute securities transactions, which was a favorable outcome for Ripple and XRP holders.
The SEC’s recent appeal introduces uncertainty regarding the legal status of XRP. This has caused a significant drop in the token’s value, as traders and investors become cautious of potential reclassification. Since the SEC’s appeal, XRP has seen a 16% decline, erasing its previous gains from September.
Many traders are reducing their exposure to XRP due to the potential risk that a higher court could overturn the previous ruling, thereby categorizing XRP as a security under U.S. law.
Middle East Tensions Add to Market Pressure
In addition to the regulatory uncertainty, rising tensions in the Middle East are contributing to XRP’s recent price drop. Overnight airstrikes by Israel on Beirut and potential retaliations against Iran have led to heightened geopolitical risks, causing a shift in market sentiment.
These developments have spurred a sell-off in risk assets, including cryptocurrencies like XRP, as investors flock to safe-haven assets such as the US dollar and bonds. The US Dollar Index (DXY) has surged to its highest level in a month, further increasing pressure on XRP and other digital currencies.
Technical Analysis of XRP’s Price Movement
From a technical perspective, XRP’s price is moving within a well-defined ascending channel pattern. The upper trendline of this channel, ranging between $0.65 and $0.69, has acted as resistance, while the lower trendline around $0.50 to $0.52 provides support.
In recent days, XRP has faced multiple rejections near the upper resistance level, which aligns with the 0.786 Fibonacci retracement level at $0.6542. These rejections contributed to the recent downward momentum, pushing XRP’s price lower on October 3.
As of now, XRP is trading near the lower boundary of the ascending channel, coinciding with the 0.618 Fibonacci retracement level at approximately $0.5165. Historically, this area has drawn significant buying interest, which could signal the potential for a rebound.
Will XRP Rebound or Continue to Decline?
If buying interest resurfaces at the current levels, XRP could rebound and test the upper resistance near $0.65 by the end of October. However, if the cryptocurrency breaks below the lower channel and the 0.618 Fibonacci level, it may face a deeper decline, with the next support zone around $0.4639 at the 0.236 Fibonacci level.In summary, XRP’s recent price drop can be attributed to the SEC’s appeal in the Ripple lawsuit and increased geopolitical tensions in the Middle East. These factors have created a risk-off environment, pushing investors toward safer assets. While there is potential for a price recovery, much depends on how the legal and geopolitical situations unfold.
