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XRP faces a sharp price drop following the SEC’s intent to appeal the Ripple lawsuit ruling, but historical data suggests all hope is not lost.
Following reports of the SEC’s appeal notice, XRP has crashed 17.66% on the weekly charts. The recent drop positions XRP as one of the biggest losers in the crypto market during a period of general market correction.
However, past movements suggest XRP’s case is not particularly hopeless, and the asset is still capable of reaching new heights.
Historical Context
For context, historical data shows that XRP reacted in a similar manner when the SEC first sued Ripple and its executives in December 2020 for allegedly carrying out $1.3 billion worth of “unregistered securities sales” involving XRP.
Notably, XRP was trading for $0.55 in the week the charges came up in late December 2020. After the lawsuit began, investors panic-sold their holdings and XRP collapsed 69% within two weeks to hit a bottom of $0.17 that month.
However, XRP’s price stabilized at the start of 2021 amid the drop in the panic sales. This led to a recovery for XRP price. As the crypto market showed signs of a bull phase, XRP leveraged this to surge to a peak of $1.96 in April 2021, surpassing its value before the lawsuit began.
The $1.96 high of April 2021 marked a 1,052% increase from the $0.17 low of December 2020. XRP took four months after the lawsuit began to recover and hit the $1.96 peak.
XRP Follows Similar Pattern
Now, with the SEC filing the notice of appeal, XRP has taken a similar downturn, currently trading for $0.52. While there are chances of further downside momentum, if the bulls are able to stabilize the price at the $0.52 support, a recovery from this level could lead to impressive gains supposing the 2020/2021 pattern plays out.
If XRP witnesses a similar 1,052% rise from the $0.52 level, its price could surge to around $6. Should the 4-month timeframe materialize, the $6 price could come up in January next year, coinciding with a possible bull run in the broader market.
However, for this recovery to kick off, the market must meet certain conditions. XRP’s price movement follows the broader market direction, and with ongoing economic uncertainties, such as inflationary pressures and geopolitical tensions, the next phase of the bull run might take longer to materialize.
Notably, market veteran Peter Brandt asserted in an earlier analysis that Bitcoin (BTC) remains in a bearish phase despite a recent surge above $66K. Now, BTC has dropped to the $61K region, leading Brandt to suggest the downturn might continue for some time.