XRP dropped as low as $ 0.33 earlier in the day amid news that the US Securities and Exchange Commission (SEC) has formally sued Ripple and its managers.
The SEC accuses the San-Francisco-based fintech startup of illegally selling $ 1.3 billion worth of unregistered securities to fund its business operations. According to the SEC’s complaint, the company and its founders offered XRP sales to investors in the US and around the world to achieve their goals.
The company’s president, Brad Garlighouse, said in a recent interview that he will be sued by the SEC. He also claimed that Ripple was ready to defend his position in court. XRP, one of the world’s leading cryptocurrencies, has lost more than 37% in the last two days and more than 25% after the news.
Ripple even got criticism from other members of the crypto community. Some even said that they now view XRP as a fraud.
The collapse of XRP
Before Brad Garlinghouse announced that the SEC was planning to sue Ripple, XRP was trading at $ 0.57. The coin soon fell into the $ 0.45 support zone. As soon as the SEC acknowledged the charges against Ripple, this support zone was broken.
At the time of writing, XRP is trading at $ 0.36. Despite recovering from its intraday lows, it became the worst-performing altcoin in the top 10 as the coin lost about a quarter of its value on a daily basis. As Tether replaced XRP after the recent crash, XRP lost its title as the third largest cryptocurrency in the world.
Technically, XRP has recovered from the daily EMA100 at $ 0.35. However, only a sustainable move above $ 0.45 will relieve bearish pressure and allow for a prolonged recovery. Besides, a failure in the daily EMA100 will increase the downward pressure and pave the psychological path for $ 0.3, powered by the daily EMA200.
In terms of macro support levels, XRP could find a soft low at $ 0.34, $ 0.32, $ 0.30, $ 0.28 and $ 0.25. However, XRP may continue to decline as investors focus more on the downside of the case than on Ripple’s probability of winning.