Bearish sentiment across the broader crypto market has led traders to take profits on recent price movements, even for tokens with positive fundamentals.
XRP, one of the largest cryptocurrencies by market capitalization, saw its value drop nearly 4% after initially surging on news of Ripple Labs’ favorable court ruling against the U.S. Securities and Exchange Commission (SEC) yesterday.
Despite the landmark ruling, which had temporarily boosted XRP’s price, traders have opted to sell and lock in profits rather than adopt a buy-and-hold strategy.
The price of XRP surged 26% as a New York federal judge moved closer to ending a three-year securities lawsuit against Ripple Labs, which executives are hailing as a “victory” for the crypto industry.
Following the ruling, XRP’s price soared from $0.50 to $0.65, with trading volumes surging from $1.2 billion on Tuesday to $4.2 billion within 24 hours.
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On August 7, the judge ordered Ripple Labs to pay a $125 million civil penalty and imposed a permanent injunction against the company, prohibiting future violations of U.S. securities laws. This ruling is seen as a major step toward concluding the case brought by the Securities and Exchange Commission (SEC), which began in December 2020.
XRP recovered most of its losses from the broader crypto downturn that began on August 5, according to CoinMarketCap data. As of the latest update, XRP is trading at $0.60.
Ripple Labs CEO Brad Garlinghouse shared his satisfaction with the outcome, posting on X, “This is a victory for Ripple, the industry, and the rule of law. The SEC’s headwinds against the entire XRP community are gone.”
Co-founder Chris Larsen added “The SEC’s unhinged campaign against us is finally over. Let’s all hope this ends this Administration’s war on crypto.”
The XRP price surge also caught the attention of traders, with over $5.4 million worth of short positions being liquidated after the price spike, according to CoinGlass data. If XRP’s momentum continues and the price hits $0.65, an additional $20 million in short positions could be wiped out.
