- XRP has regained the vital $2 mark as President Trump reverses his stance on reciprocal tariffs.
- Massive liquidations affected traders with short positions as cryptocurrencies surged on Thursday.
- A rise in open interest, according to Coinglass data, indicates increased activity and a growing optimism in the market.
On Thursday, Ripple (XRP) aims to maintain support above $2.0020 after a 14% surge over the past 24 hours. Currently trading at $2.0007, the token showcases an increasing bullish attitude among market participants. The positive response followed US President Donald Trump’s unexpected reversal on reciprocal tariffs announced on Wednesday, fueling positive momentum throughout the market.
XRP bounce liquidates short traders
The rebound in XRP prices from Monday’s low highlights the strength of the cryptocurrency market, especially with over $1 billion lost to liquidations at the week’s start. Trump’s prolonged insistence on reciprocal tariffs had hindered market liquidity, leaving many investors in a state of paralysis.
However, the President made a noteworthy reversal on Wednesday, just a day after implementing the tariffs, granting relief to numerous countries and offering a lifeline to global markets. The news was felt across Asian markets on Thursday, including Chinese stocks, despite Trump’s escalation in the tariff conflict with China.
Throughout Wednesday’s late American trading session and into the Asian session on Thursday, cryptocurrencies showed signs of recovery. Bitcoin reached a daily peak of $83,541 before adjusting to $82,433 as of the current writing.
Altcoins, with Ethereum (ETH) leading the pack of major smart contract tokens, reacted favorably to this renewed optimism, continuing to rise from the persistent declines witnessed since April 2. Ether has seen a 13.7% increase, now trading around $1,613, while BNB surged to $574 during the late Asian session.
According to data from Coinglass, the international money transfer token has recorded a notable 6.68% rise in derivatives open interest (OI) to $3.05 billion. Concurrently, the options volume for XRP increased by 21.36% to $7,670.
Amid the significant liquidations that took place on Monday, which primarily affected long-position traders, Trump’s unexpected tariff reversal caught short-position traders off guard, leading to the liquidation of $18 million. In just the past 24 hours, $24.16 million worth of positions have been liquidated, indicating a forced closure of $6.16 million in long positions.
XRP derivatives analysis data
The rise in OI suggests that the number of outstanding contracts or options is increasing, reflecting a surge in funds entering the market. This indicates heightened activity and a growing bullish outlook. Therefore, if this momentum persists over the coming days, XRP could gain traction above $2.0000, enhancing the likelihood of a breakout towards the next significant resistance at $2.5000.
XRP on the verge of signaling a buy
The upturn from Monday’s low of $1.6128 to highs exceeding $2.0000 within the last 24 hours makes XRP appealing to long traders, particularly with the Moving Average Convergence Divergence (MACD) indicator likely to generate a buy signal. A daily close above $2.0000 will safeguard these gains and could prompt traders to seek additional exposure to XRP. Observing the MACD line (blue) crossing above the signal line (red) will help confirm the upward trend.
XRP/USD daily price chart
The 200-day Exponential Moving Average (EMA) is just below the $2.0000 threshold at $1.9485. Maintaining this immediate support would further solidify the bullish sentiment.
Nonetheless, the persistent macroeconomic risks tied to President Trump’s unpredictable tariff strategy remain a concern. The situation is in constant flux, keeping traders alert and prompting them to adopt prudent strategies such as dollar-cost averaging or other risk management techniques to protect their capital.
Any declines below the support indicated in green could potentially lead to losses targeting levels around $0.4500, a price zone last seen in November 2024.
SEC vs Ripple lawsuit FAQs
The determination depends on the specific transaction, according to a court ruling released on July 14, 2023:
For institutional investors or over-the-counter transactions, XRP is classified as a security.
For retail investors who purchased the token through programmatic sales on exchanges, on-demand liquidity services, and other platforms, XRP is not considered a security.
The SEC filed charges against Ripple and its executives for allegedly raising over $1.3 billion through an unregistered asset offering of the XRP token.
While the judge ruled that programmatic sales are not classified as securities, sales of XRP tokens to institutional investors were deemed investment contracts. In this instance, Ripple violated US securities law and was ordered to pay a $125 million civil penalty.
The ruling represents a partial victory for both Ripple and the SEC, contingent on perspective.
Ripple scored a significant win by having programmatic sales ruled as non-securities, potentially benefiting the broader crypto sector since many assets under SEC scrutiny are managed by decentralized entities selling their tokens primarily to retail investors through exchanges.
However, the ruling fails to conclusively address what defines a digital asset as a security, leaving uncertainty about whether this lawsuit will set a precedent for other ongoing cases impacting numerous digital assets. Ongoing debates about the appropriate level of decentralization needed to avoid the “security” designation or how to distinguish between institutional and programmatic sales continue.
The SEC has intensified its enforcement activities in the blockchain and digital assets sector, bringing charges against platforms like Coinbase and Binance for allegedly breaching US securities laws. The SEC maintains that the majority of crypto assets are securities and thus subject to stringent regulation.
While defendants may leverage aspects of Ripple’s ruling in their favor, the SEC can also cite it to justify its ongoing regulation by enforcement strategy.