Ripple Price Forecast: XRP rally faces uncertainty after Court denies SEC-Ripple joint motion

• Judge Analisa Torres denies the SEC and Ripple’s joint request for an indicative ruling to dissolve the $125M penalty injunction.

• Judge Torres cited procedural issues, emphasising the need for a compelling case to justify withdrawing her ruling.

• XRP’s price shows strength, rising slightly above support at $2.40, although its upside potential remains uncertain.

Ripple (XRP) price trades broadly sideways at around $2.41 on Friday, rising slightly after a minor correction from this week’s peak of $2.65 to support $2.34. This comes after United States (US) District Judge Analisa Torres rejected Ripple Labs and the Securities and Exchange Commission’s (SEC) joint request for an indicative ruling. The parties had reached a settlement agreement last week, pending judicial approval.

SEC-Ripple joint request for an indicative ruling denied 

Judge Analisa Torres of the US District Court Southern District of New York has rejected a joint request by Ripple and the SEC for an indicative ruling that would have seen the token issuer pay only $50 million as a penalty instead of the $125 million imposed by the Court in 2024.

The lawsuit filed by the SEC in December 2020 alleged that Ripple “engaged in the unlawful offer and sale of securities in violation of Section 5 of the Securities Act.” According to the July 12, 2023 ruling, “the Court granted in part and denied in part the parties’ demand for summary judgment.” 

Judge Torres ruled that the sale of XRP on the open market or cryptocurrency exchanges did not constitute a security. However, Ripple had a case to answer for its direct institutional sale of XRP tokens.

Ripple was penalised $125 million, significantly below the SEC’s initial request of $2 billion for violating, in part, the Securities Act. The money was deposited in an interest-bearing account, but Ripple and the SEC appealed the ruling, with the cross-appeals pending judgment before the Second Circuit.

Ripple and the SEC agreed on May 8 to seek to settle the lawsuit in both the District Court and the Second Circuit. The parties mutually agreed that Ripple pays $50 million to the SEC upon the Court’s vacation of the injunction against Ripple Labs, subsequently lowering the penalty by 60%. 

On dismissing the joint request for indicative ruling, Judge Torres cited procedural issues, adding that the District Court must “determine whether the proposed consent decree is fair and reasonable with the additional requirement that the public interest would not be disserved in the event the court” moves to grant the motion effectively ending the lawsuit.

Despite the denial, Judge Torres outlined a clear path that must be followed by the SEC and Ripple to ensure the agreement is fair and reasonable. According to crypto lawyer John Deaton, the Court must ascertain that the thousands of legal hours and judicial manpower committed to the case in the last five years did not go to waste.

Ripple’s Chief Legal Officer, Stuart Alderoty, said after the ruling that Ripple will work with the SEC to revisit the matter. Alderoty clarified that the ruling does not jeopardise Ripple’s past wins, as XRP is not a security.

XRP’s uptrend holds steady despite the ruling

XRP’s price gains slightly over 1% on Friday, trading around $2.41 at the time of writing. The token’s short-term technical outlook is structurally bullish with the Moving Average Convergence Divergence (MACD) sitting above the mean line. At the same time, the MACD line (blue) gap above the signal line (red) upholds the buy signal confirmed on May 8. A buy signal manifests when the MACD line crosses above the signal line.

XRP’s position above three up-trending moving averages, ranging from the 50-day Exponential Moving Average (EMA) at $2.27, the 100-day EMA at $2.25, to the 200-day EMA at $2.03, signals a strong bullish momentum.

XRP/USDT daily chart 

For now, the uptrend’s target at $3.00 remains in sight, with traders likely to look for a daily close above $2.40, the immediate support. A break above the weekly peak of $2.65 would encourage traders to buy XRP, as confidence improves for a breakout to $3.00.

However, XRP is not out of the woods, and extended declines toward the 200-day EMA support at $2.00 cannot be ruled out yet. The Relative Strength Index (RSI) indicator at 56.36 reflects the drawdown from $2.65 in the last few days. If headwinds overshadow demand, XRP could explore lower levels as the RSI indicator slides below the midline at 50 towards the oversold region.