The litigation outcome of the US SEC against Ripple has a strong correlation with the xrp price usd. Historical data shows that regulatory rulings can cause sharp fluctuations. In July 2023, the Southern District Court of New York ruled that the “programmatic sale” of XRP did not constitute a security, driving the xrp price usd to surge by 75% in a single day (from $0.47 to $0.82), with trading volume surging by 480% to $9 billion (Data source: CoinMarketCap). If the next ruling (expected in November 2023) completely rejects the SEC’s appeal, Bloomberg legal analysts predict that prices could rise by 50% to 80%, with a target range of $0.75 to $0.90. Conversely, if the SEC wins the lawsuit, the price may fall to $0.35 (the 61.8% Fibonacci retracement level), a 30% drop from the current $0.50.
From the perspective of the litigation process, the probability of the SEC winning the case affects market expectations. According to Bloomberg Intelligence, the SEC’s historical win rate in similar securities lawsuits is 67%, but in the Ripple case, due to partial winning precedents (the July ruling), the SEC’s current win rate estimate has been lowered to 45%. If the court maintains the original ruling, the xrp price usd may break through the resistance level of $0.55 (the high point in September 2023), trigger the liquidation of $120 million of short contracts (source: CoinGlass), and attract approximately $800 million of institutional capital inflows (predicted by jpmorgan Chase).
On-chain data reveals the movements of large position holders. Santiment’s monitoring shows that the number of addresses holding 1 to 10 million XRP increased by 7% in the 30 days before the ruling, but during the same period, such “whales” net transferred 180 million XRP (about 90 million US dollars) into the exchange, indicating that some investors were laying out hedging in advance. The IntoTheBlock model estimates that if the price rises to $0.60, it will face the selling pressure of 19 billion XRP (accounting for 35% of the circulating supply) to break even. It would require a daily inflow of over $1.5 billion to be digested, which is equivalent to 83% of the current average daily trading volume ($1.8 billion).
Technical indicators suggest an intensification of short-term fluctuations. The current daily RSI of xrp price usd is 58 (neutral range), but the MACD histogram continues to expand above the 0-axis, forming a bullish divergence. If the ruling is favorable, the price may break through $0.55 and challenge $0.75 (the resistance level for 2023), which corresponds to $260 million of outstanding options. Short positions need to add a margin of $110 million (data source: Deribit). However, if the ruling is delayed in being announced, the 30-day historical volatility (currently 42%) could climb to 60%, approaching the level in April 2021 (peak 68%).
Market sentiment coexists with the risk of diversion by competing currencies. The cryptocurrency Fear and Greed Index (45 in October) shows neutral sentiment, but the social discussion volume of XRP typically increased by 200% in the week before the ruling (data tool: LunarCrush). It should be noted that competing coins such as Solana (with a year-to-date increase of +210%) and Chainlink (+160%) may divert funds – if the increase of xrp price usd is lower than 30%, some investors may shift to high-beta assets. In addition, if the Bitcoin spot ETF is approved at the same time, it may suck up more than 50% of the market’s liquidity (Grayscale Research report).
Macroeconomic factors suppress the upward space. The yield on the 10-year US Treasury bond reached 4.8% (the highest since 2007). If the Federal Reserve raises interest rates by 25 basis points in November, the total market value of cryptocurrencies may shrink by 15%-20%, limiting the increase of xrp price usd even under the favorable ruling. Historical regression models show that the 30-day correlation between XRP and the S&P 500 index is 0.35. If the US stock market drops by 10% due to interest rate risk, XRP may follow suit and fall by 5% to 8%.
Operation strategy suggestion: Build positions in batches within the range of 0.48-0.52 US dollars (50-day MA support), set the stop-loss at 0.42 US dollars (200-day MA), and if the ruling is favorable, target 0.75 US dollars (risk-reward ratio 1:3). If the ruling is unfavorable, reverse short to $0.35 (profit-loss ratio 1:2). It should be noted that exchanges such as Coinbase may suspend XRP trading during extreme volatility (such as the suspension of GameStop stocks in January 2021), and liquidity risks need to be hedged in advance.