Ripple and SEC Settlement Scenario Post-Coinbase Ruling

CryptoLaw founder and Amicus Curiae attorney John E. Deaton had this to say about the Ripple opposition filing,

“As expected, Ripple demonstrates that an interlocutory appeal here is simply not warranted. The SEC has always maintained Howey is a fact-specific inquiry and for an interlocutory appeal to be warranted, the second circuit should not have to review the extensive factual record. Footnote 2 destroys the SEC’s argument on this matter.”

There was also some debate over an SEC settlement. Deaton believes a ruling on the Coinbase (COIN) motion to dismiss is the key to any SEC settlement. Deaton stated,

“The only way Ripple and the SEC settle before the end of the year is if Judge Failla grants the Coinbase MTD (or partially grants it – finding token sales on an exchange in a blind bid/ask transaction do not fall under US securities laws but allows the staking component to move forward. If that happens then the SEC and Gary Gensler may be forced to pivot.”

Deaton went on to say,

“I doubt the Solicitor General would allow an appeal in that scenario, one that could reach the Supreme Court, allowing for the High Court to strip away, not only the SEC’s power, but all other federal agencies as well.”

A scenario in which the SEC and Gary Gensler must pullback from the regulation by enforcement onslaught would be a boon for the US crypto market. On Wednesday, we discussed the significance of the SEC cases against Ripple and Coinbase for the broader crypto market.

The combined effect of Judge Failla granting the Coinbase MTD and Judge Torres declining the SEC motion for interlocutory appeal would materially impair the SEC’s credibility. Such an eventuality may force Capitol Hill to step forward with new legislation.

The Sunday Session

There is no Court activity in the SEC v Ripple and SEC v Coinbase cases to draw interest today. However, we expect further debate on the pending filings and rulings.

The debated scenario for a SEC settlement Ripple will likely give the SEC v Coinbase case more influence.

Beyond the two cases, investors should monitor the news wires for US lawmaker chatter and SEC activity. There is also the ongoing SEC v Binance case to consider as investors reel over the SEC decision to delay the BTC-Spot ETF decisions.

XRP Price Action

Daily Chart

XRP remained below the $0.5042 resistance band and the trendline this morning. Uncertainty surrounding the Judge Torres ruling on the SEC motion for interlocutory appeal left XRP rangebound.

However, a move through the $0.5042 resistance band would give the bulls a run at the Trend line. Renewed optimism of the Court denying the motion for interlocutory appeal would support a breakout from the Trend line.

Failure to retest resistance at the trend line would leave XRP on the back foot. A return to sub-$0.49 would bring the $0.4322 support band into view.

Considering the 32.04 14-4H RSI reading, XRP can retreat further before entering oversold territory.

4-Hourly Chart

XRP hovers below the 200-day EMA, the trend line, and the $0.5042 resistance band. This morning, XRP remains below the psychological resistance level of $0.50. Failure to break above the $0.5042 resistance band would leave XRP under selling pressure.

However, a move through the resistance band would see XRP retest the trend line. Failure to break above the trend line would bring sub-$0.45 and the $0.4322 support band into view.

Considering the 14-4H RSI 32.04 reading, XRP can fall further before hitting oversold territory.