XRP plummets to $0.47 on news of the SEC suing Ripple

Ripple (XRP) has experienced a sharp price decline on the announcement that the SEC will sue its company, Ripple

The fourth-largest cryptocurrency by market cap experienced a horrible day as its price plummeted over 20% and broke the $0.5 price level. The dip came as a result of news stating Ripple and its founders will face a lawsuit by the SEC (securities and exchange commission). The price drop was additionally fueled by the crypto sector declining slightly as a result of news that a new strain of COVID-19 virus is spreading.

XRP’s short-term outlook is bearish at the moment, as the SEC lawsuit situation changes the fundamentals completely. When taking a look at its week-over-week performance, XRP managed to lose 18.87% of its value. BTC and ETH outperformed it by a large margin despite their prices declining as well, as they managed to go down 0.27% and 5.60%, respectively.

At the time of writing, XRP is trading for $0.47, representing a 23.35% month-over-month decrease.

XRP/USD

The move towards the downside was sharp, and brought XRP’s price down to $0.47 levels. However, the price correction seemingly didn’t have as much panic selling as we might expect, as the move got stopped out at the first strong support level.

XRP’s short-term outlook is currently dependent on how the cryptocurrency handles the $0.47 level, as well as on how the SEC lawsuit will play out.

 XRP/USD daily price chart. Source: TradingView

The technical overview shows XRP’s RSI indicator on the daily time frame gaining momentum to the downside. The volume during the downturn seems steady, implying that XRP bears did not panic as much as some predicted.

XRP’s downturn got stopped by the descending (dark red) line, as well as the $0.47 support line. This level is looking like it will become a pivot point, and a move to either side of this level could be a good indicator of XRP’s short-term direction.

XRP/USD 4-hour chart. Source: TradingView

Taking a look at the 4-hour time-frame, we can see how XRP dropped below its $0.536 and $0.5 levels, as well as how it got stopped out by the descending (dark red) line and the $0.47 level.

If XRP manages to confirm its position above $0.47, it can look to tackle its immediate resistance level of $0.5. However, if its price drops below the descending line and continues downwards, we can see an even stronger panic-inducing selloff.