The U.S. Securities and Exchange Commission (SEC) has officially filed an appeal against Ripple Labs concerning XRP. This comes after speculation about whether the regulator had missed the deadline to do so.

Since the appeal was filed, XRP has been on a downward trajectory, dropping 2% in the last 24 hours. With bearish sentiment growing around the altcoin, the decline could deepen. The key question now is: How much further could XRP drop and for how long?

Ripple's Legal Challenges

In its October 17 statement, before submitting the appeal, the SEC did not contest the ruling that sales of XRP to retail investors via exchanges are not securities. Instead, the agency seeks clarification on whether the U.S. District Court for the Southern District of New York erred in its judgment regarding Ripple’s CEO Brad Garlinghouse and co-founder Chris Larsen.

The SEC has also requested the case be reviewed "de novo," meaning the court will reassess how the law was applied from a fresh perspective.

"No surprise – it was clearly stated once again. There is NO appeal against the court's decision that 'XRP is not a security.' This decision stands as the law of the land," said Ripple's chief legal officer, Stuart Alderoty.

How XRP Reacted

XRP’s trading activity significantly decreased following the appeal filing. Currently, the altcoin is trading at $0.54, reflecting a 2% drop in the past 24 hours.

This price decline was accompanied by a rise in XRP's Network Value to Transactions (NVT) ratio, which reached a yearly high of 634. The NVT ratio measures whether an asset is overvalued or undervalued by comparing its market capitalization to transaction volume. A rising NVT along with a falling price is a bearish signal, indicating that the asset is overvalued despite the price drop and that weak buying pressure is driving the price lower.

Calm Among Long-Term Holders

Despite the SEC's appeal and increased selling activity, long-term holders of XRP (LTH) have remained calm. According to data from Santiment, the token age consumption metric, which tracks the movement of long-held coins, has not shown any significant spikes. This suggests that most of the selling is coming from newer coins, with long-term holders not under significant selling pressure.

XRP Price Prediction: Short-Term Traders Should Be Cautious

While long-term XRP holders remain steady, short-term traders have begun selling, which could lead to further price volatility in the near future. XRP is currently trading at $0.54, just above the support level of $0.52. If selling pressure increases, the price of XRP could drop below this support level and fall to $0.38, representing a 30% decline from current levels.

However, if selling pressure eases and new demand emerges, XRP’s price could rebound, breaking past the resistance at $0.56 and potentially reaching $0.65.

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