The U.S. Securities and Exchange Commission (SEC) dropped securities-violations charges against the senior executives of fintech company Ripple on Thursday, giving XRP its greatest daily percentage rise in three months.
The fifth-largest digital asset in the world, XRP, increased 6.5% to 52 cents, reaching a high of 53 cents before falling down to 51 cents at the time of publication.
The SEC agreed to drop charges against Ripple CEO Brad Garlinghouse and co-founder Chris Larsen in a court filing on Thursday. The company made the move after the Southern District of New York ruled that Ripple’s offering and selling of XRP on digital asset exchanges did not constitute offers and sales of investment contracts as the SEC had claimed.
About three years ago, the SEC charged Ripple Labs, a company closely associated with XRP, with breaking securities laws when it raised $1.3 billion through investor sales of XRP. Even when the market as a whole rose, the legal issues kept XRP under pressure.
The XRP surge on Thursday was most likely driven by buyers from the spot market. There is a perception that spot traders’ rallies are more resilient than those of leverage traders.
Cumulative volume delta (CVD) in spot exchanges increased simultaneously with the price of XRP, according to data from Coinalyze, indicating net input into the market. Stablecoin and coin-margined futures markets saw no change in CVD during this time.
Range breakout pending
Even if Thursday’s increase was significant, it was not enough to break the two-month price consolidation between 49 and 45 cents.
A large move frequently occurs after range play, which symbolizes volatility breakdown. According to this reasoning, the market gathers momentum during periods of consolidation and releases it when the range is eventually breached.