Category: Crypto News, News
Tariff turbulence impedes XRP recovery as on-chain indicator signals buy
- XRP rebounds after immense volatility in recent days, triggered by US President Donald Trump’s reciprocal tariffs.
- A negative MVRV ratio signals that XRP is significantly undervalued, calling on traders to buy the token.
- A noticeable decline in the network’s on-chain activities could slow recovery.
Ripple (XRP) seeks stability in a volatile crypto landscape influenced by macroeconomic factors, including reciprocal tariffs. The international money transfer token hit a low of $1.64 on Monday after opening the week at $1.92, representing a 14.5% daily drop. At the time of writing on Tuesday, during the late Asian session, XRP had recovered Monday losses, exchanging hands at $1.92, as global markets continue to adjust and digest United States (US) President Donald Trump’s ever-changing tariff policy.
XRP rebound targets $2 as President Trump maintains tariff tune
After a gruesome sell-off on Monday, major assets like Bitcoin (BTC), Ethereum (ETH), and Solana (SOL) are bouncing back. Trump’s blanket 10% reciprocal tariffs announced on April 2 will be effective on Wednesday.
Despite the bleeding in global markets, including US stocks, Trump insisted during a press conference with Israeli Prime Minister Benjamin Netanyahu on Monday that tariffs would continue as planned. The president seemed to add fuel to the fire, threatening an additional 50% tariff on China.
It is not immediately clear whether the recovery in XRP price to $1.92 is sustainable, especially with tariffs taking effect in just a day. Meanwhile, some on-chain fundamentals support the beginning of a larger rebound, calling on investors to consider buying XRP at current levels.
Santiment’s Market Value Realized Value (MVRV) metric holds 9.47% below the mean at 1 in the chart, suggesting that XRP is heavily undervalued. Traders holding the XRP token are unlikely to sell at the current price as they would realize substantial losses. This situation could translate to reduced selling pressure, hinting at a potential rebound amid growing seller exhaustion. A negative MVRV ratio has historically been viewed as a buy signal.
XRP MVRV | Source: Santiment
Can XRP sustain a recovery above $2?
XRP could rejuvenate its bullish structure if support at $2 is reclaimed. However, bulls must first navigate a volatile landscape to keep the price higher, including a daily close above the 200-day Exponential Moving Average (EMA). Moreover, the Relative Strength Index (RSI) continues to slide toward the oversold region, which may encourage sellers to stay put. At the same time, the Moving Average Convergence Divergence (MACD) indicator sustained a sell signal on March 28, suggesting a deeper downtrend is in play.
XRP/USDT daily chart
All eyes are set on the bull’s ability to reclaim the $2.00 level as support — a move that could reinforce XRP’s bullish structure and pave the way for recovery to $3.00.
However, the declining network activity observed with Santiment’s Daily Active addresses metric could slow recovery. As per the chart, only 10,100 addresses were active on the network on Monday compared to 581,000 addresses on March 19.
XRP Daily Active Addresses | Source: Santiment
A consistent drop in network activity impacts the underlying asset’s performance, depriving it of momentum to sustain recovery due to low demand. Hence, waiting for a trend confirmation before going all in and buying the dip would be prudent.
SEC vs Ripple lawsuit FAQs
It depends on the transaction, according to a court ruling released on July 14, 2023:
For institutional investors or over-the-counter sales, XRP is a security.
For retail investors who bought the token via programmatic sales on exchanges, on-demand liquidity services and other platforms, XRP is not a security.
The United States Securities & Exchange Commission (SEC) accused Ripple and its executives of raising more than $1.3 billion through an unregistered asset offering of the XRP token.
While the judge ruled that programmatic sales aren’t considered securities, sales of XRP tokens to institutional investors are indeed investment contracts. In this last case, Ripple did breach the US securities law and had to pay a $125 million civil fine.
The ruling offers a partial win for both Ripple and the SEC, depending on what one looks at.
Ripple gets a big win over the fact that programmatic sales aren’t considered securities, and this could bode well for the broader crypto sector as most of the assets eyed by the SEC’s crackdown are handled by decentralized entities that sold their tokens mostly to retail investors via exchange platforms, experts say.
Still, the ruling doesn’t help much to answer the key question of what makes a digital asset a security, so it isn’t clear yet if this lawsuit will set precedent for other open cases that affect dozens of digital assets. Topics such as which is the right degree of decentralization to avoid the “security” label or where to draw the line between institutional and programmatic sales persist.
The SEC has stepped up its enforcement actions toward the blockchain and digital assets industry, filing charges against platforms such as Coinbase or Binance for allegedly violating the US Securities law. The SEC claims that the majority of crypto assets are securities and thus subject to strict regulation.
While defendants can use parts of Ripple’s ruling in their favor, the SEC can also find reasons in it to keep its current strategy of regulation by enforcement.
Written by : Editorial team of BIPNs
Main team of content of bipns.com. Any type of content should be approved by us.
Share this article: