Ripple (XRP) holders are discussing the impact of the Financial Technology and Innovation for the 21st Century (FIT21) Act on the lawsuit between the US Securities and Exchange Commission (SEC) and Ripple. The outcome of the lawsuit could have a major impact on the price of XRP tokens on the XRP Ledger and affect money transfer company Ripple's XRP sales to institutional clients.
According to lawyer Bill Morgan, Ripple has prepared for the worst-case scenario in the lawsuit, which is a permanent ban or a complete ban on the sale of XRP tokens to institutional customers in the US.
Ripple prepares for the worst outcome in its lawsuit with the SEC
The United States House of Representatives passed bill FIT21, an important cryptocurrency bill passed by one of the branches of Congress on Wednesday. As the bill heads to the Senate, XRP holders debate its impact on the long-running legal battle between the SEC and payments company Ripple.
In the case against Ripple, the financial regulator sought a $2 billion fine and accused it of selling unregistered securities (selling XRP tokens) to institutional clients. According to lawyer Bill Morgan, Ripple has prepared for the worst-case scenario in the lawsuit. In the worst scenario, the court could permanently ban the sale of XRP tokens to Ripple's institutional customers in the US.
While the move could impact the payments company's business, attorney Morgan explained that Ripple will continue to provide services and sell XRP to institutional clients abroad, under under different licensing regimes.
The FIT21 bill may not negatively affect Ripple's XRP sales abroad and in regimes where cryptocurrencies are regulated differently, where the company already has the necessary licenses and complies with the regulations local.
Technical Analysis: XRP breaks stiff resistance, trading at $0.52
XRP price dropped nearly 18% from a high of $0.6431 on April 9 to May 23 (when the price was at $0.5282). The altcoin is consolidating since falling from its April 9 peak and has broken through stiff resistance at $0.51 multiple times this week.
On Thursday, XRP was trading at $0.5282, testing resistance at $0.5310, the 50% retracement from the April 9 peak of $0.6431 to the April 13 low of $0.4188.
The MACD, a momentum indicator, shows positive momentum supporting Ripple's uptrend. The green histogram bars above the neutral line and the MACD crossover above the signal line are signs supporting the recovery thesis for Ripple.
The RSI read 51.46, above the neutral line, supporting the asset's bullish story.
If XRP successfully sustains above $0.5310, the next target is the April 22 and May 6 highs at $0.5703. A rise to this level would result in an 8% profit from the current level of $0.5282.
XRP/USDT 1-day chart
While the outlook for XRP is positive, a candle close above $0.5310 is needed to confirm gains. If XRP fails to close above this level within the 1-day timeframe, a sweep for liquidity at the May 20 low of $0.5064 is possible.
The $0.50 level has become an important support level for XRP price over the past week. Below $0.50, XRP could find support at the May 13 low of $0.4866, another key support level formed over the past two weeks.