XRP Tumbles Below $0.60 as SEC Scrutiny Intensifies

XRP's price fell below $0.60 on Tuesday, influenced by the ongoing SEC lawsuit against Coinbase and its implications for Ripple's own case. Ripple's CLO, Stuart Alderoty, scrutinized the SEC's evidence and argued that XRP is not a security, citing Judge Torres's ruling in the Coinbase lawsuit. The SEC's varying definitions of a crypto ecosystem and departure from the Howey test in the Ripple case raise concerns about XRP's security status.

Ripple's XRP Price Plunges Below $0.60 Amid Ongoing SEC Legal Scrutiny

On Tuesday, the price of Ripple's XRP token plummeted below the psychologically important $0.60 level, marking a nearly 10-day low. This significant decline came amidst ongoing legal battles between the U.S. Securities and Exchange Commission (SEC) and both Coinbase and Ripple.

Coinbase Lawsuit and Its Impact on Ripple

The SEC's legal actions against Coinbase and Ripple are closely intertwined. Coinbase's defense in its own lawsuit against the SEC hinges on a ruling by Judge Analisa Torres in the Ripple case, which determined that XRP was not a security at the time of its sale on exchanges. This ruling, initially viewed as a partial victory for Ripple, is now being called into question after Judge Torres denied Coinbase's motion to dismiss its lawsuit.

The SEC alleges that Coinbase operated as an unregistered intermediary of securities, similar to the accusations against Ripple. The connection between the two lawsuits revolves around XRP's status as a security or non-security.

SEC's Conflicting Definitions and Straying from "Howey"

Ripple's Chief Legal Officer (CLO), Stuart Alderoty, analyzed the SEC's filing in the Coinbase lawsuit and observed that the regulator had presented four different and "confusing" definitions of what constitutes a crypto ecosystem. Alderoty further stated that in its lawsuit against Ripple, the SEC had deviated from the "Howey" test, a legal framework that determines what qualifies as an investment contract subject to U.S. securities laws.

The "Howey" test evaluates whether a transaction involves a common enterprise, an investment of money with the expectation of profits, and reliance on the promoter's efforts. Alderoty contends that the SEC's application of the "Howey" test in the Ripple case was flawed, and that XRP's "security" status is now at risk.

Technical Analysis and Price Outlook

XRP's price has been trading within a narrow range between $0.5670 and $0.6686, with these levels acting as critical support and resistance on the daily chart. The recent decline suggests bearish momentum, supported by the Relative Strength Index (RSI) and Awesome Oscillator (AO) indicators, both of which indicate a move below the neutral line.

The XRP price could potentially drop to $0.5386, a significant support level, before attempting a recovery towards resistance at $0.6686. A daily candlestick close below $0.60 could lead to a further decline towards the January 31 low of $0.4853.

On the upside, a daily close above $0.6147, the 50% Fibonacci level of the rally from the January 31 low to the March 11 high, could invalidate the bearish thesis. However, XRP faces further resistance at $0.6686 in its climb towards the year-to-date peak of $0.7440.

Implications for the SEC vs Ripple Lawsuit

The ongoing legal battles between the SEC and Ripple, coupled with the latest developments in the Coinbase lawsuit, cast uncertainty over the future of XRP's regulatory status and the outcome of the Ripple case. Investors and market participants are closely monitoring these developments for any potential implications on the XRP price and the broader cryptocurrency market.