5 min readXRP is on the rise for a third straight day as it recoups losses from earlier in the week. XRP has recovered 20% from this week’s 1.89 low to current levels of 2.32. With momentum rising, will XRP close in on $3, the March high?
XPR Dominance is outperforming the majority of altcoins, and it is at its highest level since 2020. Meanwhile, XRP’s market cap dominance has risen from 1.7% to 5.17% over the past 12 months. This suggests that XRP has seen substantial capital inflows with the number of users and an increased adoption rate relative to other crypto assets.
Interestingly, the largest altcoin, Ethereum, has seen its market cap fall from 17% to 8% over the past year, while XRP has increased over the same period.
What is driving XRP’s price higher?
XRP has been rising recently on speculation that the prolonged legal battle between Ripple and the SEC could conclude before mid-April, with the company negotiating a lower penalty.
The US Securities and Exchange Commission (SEC) has been locked in a legal battle with Ripple since December 2020 over the alleged sale of $1.3 billion in unregistered XRP. A key point of contention, which is a critical factor in deciding the case’s outcome, is whether XRP aligns more closely to a commodity, like Ethereum, than a security.
The US Securities and Exchange Commission has changed its approach towards the digital asset industry under the Trump administration. Gary Gensler, the former chairman, has left. Mark Uyeda is leading the new regime, which is more crypto-friendly. The commission has paused several lawsuits against entities including Coinbase, Binance, and Kraken, although the most notorious case, that against Ripple, still awaits a resolution.
According to Fox Business journalist Eleanor Terrett, the lawsuit is drawing to a close, with Ripple negotiating more favourable terms regarding the $125 million penalty charge applied last year. The SEC has been reviewing the case and is questioning whether Ripple did, in fact, breach any rules. Last year, the judge ruled that XRP did breach security laws. However, this wouldn’t necessarily be the case if XRP were a commodity. A reclassification could lead to a settlement.
The announcement of the end of the case will likely trigger significant volatility in Ripple’s price, potentially leading to a run higher towards $3.
XRP technical analysis
XRP has recovered from a brief spike to 1.89, rising to 2.3 at the time of writing, the 38.2% Fib retracement of the 0.49 low and the 3.4 high. A rise above 2.3 exposes the 100 SMA at 2.53, before bringing 3.00 into play.
Sellers would need to break below the 2.00 support zone to create a lower low and expose the 200 SMA AT 1.65.
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