On Thursday, XRP achieved its most significant daily percentage gain in three months as the US Securities and Exchange Commission (SEC) terminated securities-violation charges against key executives of fintech company Ripple.Thank you for reading this post, don't forget to subscribe!
XRP, the fifth-largest cryptocurrency globally, surged by 6.5% to 52 cents, reaching a peak of 53 cents before decreasing to 51 cents at the time of writing, according to CoinDesk data.
In a court document filed on Thursday, the SEC agreed to dismiss charges against Ripple Chief Executive Brad Garlinghouse and co-founder Chris Larsen. This development occurred several months after the Southern District of New York declared that Ripple’s offering and sale of XRP on digital asset exchanges does not resemble the offering and sale of investment contracts as alleged by the SEC.
Nearly three years ago, the SEC accused Ripple Labs, closely associated with XRP, of violating securities regulations by raising $1.3 billion through the sale of XRP to investors. This legal matter kept XRP under pressure despite the overall surge in the market.
The Thursday rally in XRP was primarily driven by buyers in the spot market. It is believed that rallies driven by spot buyers are more sustainable compared to those led by traders using leverage.
Data from Coinify reveals that the cumulative volume delta (CVD) across spot exchanges has increased with the price of XRP, indicating a net inflow into the market. Meanwhile, CVD remained constant in the stablecoin and coin-margin futures markets.
A rising CVD signifies increased buying activity, while a descending line indicates more selling activity.
Although impressive, the gains on Thursday were insufficient to break a two-month consolidation period between 49 and 45 cents.
A consolidation range often results in significant price movements in either direction. The rationale behind this is that the market accumulates energy during consolidation, which is subsequently unleashed when the range is eventually breached.