XRP has continued to fall today, shedding some of the gains picked up on July 13. The cryptocurrency is down relatively 5% in the past 24 hours and is currently trading at $0.6251, according to CoinMarketCap.
There are several factors contributing to the XRP sell-off, including the likelihood of an appeal from the US Securities and Exchange Commission (SEC) in the Ripple lawsuit, the rising US dollar index (DXY), and declining trading volume.
Read Also: Based On Historical Data, Analyst Predicts 634x Surge in XRP Price. Here’s the Timeline
The SEC Appeal
The SEC is considering appealing the ruling in the ruling that classified XRP as a digital asset. This uncertainty has weighed on XRP prices, as investors fear that an appeal could drag the case out and further damage the cryptocurrency’s reputation.
The SEC has not yet filed an appeal, but it has until August 12 2023 to do so. If the SEC files an appeal, the case will be heard by the Second Circuit Court of Appeals.
The Second Circuit is a federal appeals court that hears cases from New York, Connecticut, Vermont, and parts of New Jersey. The Second Circuit is generally considered to be a conservative court, so it is possible that the SEC could win its appeal. However, it is also possible that the Second Circuit could uphold the district court’s ruling.
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The Rising DXY
The dollar index (DXY) has also been rising in recent weeks, which has put pressure on all cryptocurrencies. The DXY is a measure of the strength of the US dollar against a basket of other currencies. When the DXY rises, it makes it more expensive for investors to buy cryptocurrencies priced in USD.
The DXY is currently trading at its highest level in over two years. This is due to a number of factors, including the ongoing war in Ukraine and rising interest rates in the United States.
Declining Trading Volume
Finally, XRP’s trading volume has been declining in recent weeks. This suggests that there is less interest in the crypto asset, which could be contributing to the sell-off.
The average daily trading volume for XRP has declined from over $1 billion in January 2023 to less than $500 million in August 2023. This is a significant drop, and it suggests that investors are becoming less interested in the cryptocurrency.
Read Also: XRP Price Explodes As Judge Rules In Favor of Ripple, Declares XRP Not a Security
Looking Ahead
If the SEC appeals the ruling in the Ripple lawsuit, it could lead to further declines in XRP prices. The DXY is also likely to remain elevated in the near term, which could continue to put pressure on the cryptocurrency.
However, if the SEC does not appeal the ruling and the DXY starts to decline, XRP could rebound. The cryptocurrency is still trading above its 200-day moving average, which is a bullish signal.
Overall, the outlook for XRP is uncertain in the near term. However, the digital token has shown resilience in the past, and it is possible that it could rebound if the broader market conditions improve.
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