The lawsuit slammed against Ripple has had a major effect on the token and its position in the crypto-market. Every ardent observer of the market understands its competitiveness, and with the way Ripple and XRP are positioned, it is likely that the token may lose momentum and potentially battle erasure for the next few months.
Following the lawsuit documented in a press release from the SEC in December 2020, XRP suffered a quick sweep in price. The 30% decrease that soon followed saw XRP retest previous support as it quickly fell off-balance from its $0.7680 November high. As momentum fell, XRP bulls continued to struggle between the $0.2650 levels, while the market feared for a further decline.
The mass delisting of the token from leading exchange platforms took the story from bad to worse as investors collectively withdrew their remaining tokens. Market sentiments are split between analysts who remained vocal about their support for the SEC’s decision, while the rest of the market anticipates a much-needed recovery.
However, the race to the end of the tunnel is still a hectic one, as Ripple has also lost its spot as the 4th most valued cryptocurrency to Polkadot’s DOT. Although XRP is still amongst the top five, it is still at risk of losing that position, for the first time since 2013. With a loss of more than $5 billion in market cap, recorded since the announcement of the suit, XRP may no longer be an industry favorite. Altcoins are usually a slippery slope for investors, who are very concerned about their value and longevity.
Here today and gone tomorrow is a reoccurring pattern with many altcoins, as such investors are fond of securing their funds in assets that make up the top five. With XRP being at risk of falling down this ladder, coupled with Ripple’s cofounder Jed McCaleb selling XRP tokens worth millions of dollars in his usual fashion, it is unclear where the market is headed. In the midst of this chaos, it is worth noting that XRP recently surged by 15% following a swift bullish trend that sent prices above the $0.3000 levels.
Outperforming Bitcoin and Ethereum in the last 48hours, more potential gains could’ve sent the asset to the $0.4000 levels but the bears managed to hinder this price movement, and at press time, XRP has made a downward correction to $0.26. The future of Ripple now depends on the outcome of the initial pretrial conference scheduled by the Southern District Court for the 22nd of February. For the meantime, XRP is faced with a task to maintain its market position or continue losing market credibility