XRP could rally 18% amidst changes at the SEC and bullish on-chain metrics

• SEC crypto enforcement division plans reassignments of its staff.
• XRP traders took large volume profits on their holdings, which slowed down on Wednesday as holders realized losses.
• XRP dips nearly 3% on Thursday, down to $2.3482.

The Securities & Exchange Commission (SEC) has scaled back its unit of lawyers and staff members dedicated to crypto enforcement action. Ripple’s Chief Technology Officer (CTO) Stuart Alderoty shared his optimism on the resolution of the SEC vs. Ripple lawsuit. 

XRP wiped out nearly 25% of its value in the past seven days per TradingView data and hovers above $2 on Thursday. 

XRP could rally for these reasons 

A New York Times report shows that a special unit of over 50 lawyers and staff members dedicated to crypto enforcement actions are being moved. The report states that this is the first of its kind of administrative change for pulling back on the regulation of digital assets and promoting the growth of crypto. 

The lawyers have been assigned to other departments as part of the shake-up, and the SEC did not comment on the matter. 

While XRP suffers from the negative impact of the SEC appeal and other lawsuit developments, positive developments in regulation could pave way for recovery in XRPLedger’s native token.

Stuart Alderoty, CTO at Ripple shared his enthusiasm and commented on a meeting with SEC crypto task force lead, Commissioner Hester Peirce in a recent tweet on X:

Another key market mover for XRP is bullish on-chain metrics. Santiment data shows a negative spike in Network Realized Profit/Loss, meaning XRP traders realized $124.92 million in losses on Wednesday, February 5. 

Daily active addresses recorded this week remain above the average from 2024, and the total number of XRP token holders is in an uptrend. 

XRP on-chain metrics | Source: Santiment 

Hon Ng, Chief Legal Officer at Bitget, told FXStreet in an exclusive interview:

“Recent indications of staff reassignments within the SEC's crypto enforcement division may signal the start of a much-expected pivot by the SEC to be more focused on industry engagement and eventually bringing more clarity to the regulatory framework for digital assets in the US.

“This shift presents an opportunity for the SEC to reclaim its influential role in shaping global standards for digital asset regulation. Although the SEC is beginning a journey toward clearer regulations, an immediate overhaul is unlikely. Commissioner Hester M. Pierce's recent statement indicates a movement toward regulatory clarity, but the SEC remains committed to taking enforcement actions when necessary.”

XRP could rally 18%

XRP holds steady above support at the psychologically important $2 level. The altcoin faces resistance at $2.5238, the January 14 low and a level that held as support for over two weeks. Several imbalance zones are observed in the XRP/USDT daily price chart. If XRP retests support in these levels, the altcoin could rebound and resume consolidation or recovery in the short term. 

A retest of the February 4 high of $2.7874 is likely, and this level marks an 18.9% gain in XRP price. 

The Relative Strength Index (RSI) reads 34 and is heading toward the oversold zone under 30. This would create a buy signal and identify XRP as an “oversold” asset. 

The Moving Average Convergence Divergence (MACD) indicator shows red histogram bars, meaning the underlying price trend in XRP is negative. Traders need to keep their eyes peeled for a trend reversal and a crossover of the MACD line above the signal line, marking a shift in underlying momentum of the token. 

XRP/USDT daily price chart 

At the time of writing, XRP trades at $2.3482.