After a lengthy period of underperformance, XRP, the native cryptocurrency of the Ripple payment protocol, has shown a significant upturn against Bitcoin (BTC). For the first time in three years, the XRP/BTC pair broke out from its multi-year downtrend, showing signs of a newfound momentum.
There are a few key reasons behind the recent resurgence of XRP. Firstly, the altcoin market has been on a steep upward climb, with Ethereum (ETH) leading the way. As the second-largest cryptocurrency, Ethereum's performance tends to have a significant impact on the broader altcoin market. Secondly, the lawsuit filed by the U.S. Securities and Exchange Commission (SEC) against Ripple Labs is showing signs of a potential resolution. This has eased investor concerns and encouraged a positive market sentiment.
In December 2020, the SEC filed a lawsuit against Ripple Labs, alleging that the firm raised over $1.3 billion through an unregistered securities offering. The legal battle has had a significant impact on the price of XRP, causing it to plummet. However, recent developments in the lawsuit, including a series of legal victories for Ripple, have stoked optimism among investors.
The potential for a settlement or a positive verdict for Ripple Labs could cause the price of XRP to surge. Given the scale of the lawsuit and its impact on Ripple Labs, a win could potentially lead to a strong XRP rally, particularly as it would remove the uncertainty that’s been surrounding the cryptocurrency.
Despite the ongoing lawsuit, the technical structure for XRP is improving, with the price pushing past key resistance levels. According to data from TradingView, XRP has broken out of its multi-year downtrend against Bitcoin, a sign that the market structure of the cryptocurrency is strengthening. This development has prompted several analysts to forecast a bullish outlook for XRP.
In conclusion, the combination of an improving altcoin market led by Ethereum, potential resolution of the SEC lawsuit, and a strengthening technical structure has set the stage for the resurgence of XRP. However, investors should remain cautious as the lawsuit is still ongoing and any unexpected developments could impact XRP’s price in the short term.