Ripple (XRP) faced a sharp decline after U.S. District Judge Analisa Torres rejected a proposed $50 million settlement between Ripple Labs and the SEC, upholding a $125 million penalty instead. The XRP price dropped 1.3% on Saturday, testing the $2.40 support level. Derivatives data reveals traders withdrew $160 million in open interest, signaling caution amid renewed regulatory uncertainty.
Market Reaction: XRP Tests Key Support Levels
- Price Drop: XRP fell to $2.38, down 3% since the ruling.
- Derivatives Exodus: $160 million pulled from futures markets; long positions liquidated totaled $11 million (92% of all liquidations).
- BTC/ETH Outperformance: Bitcoin and Ethereum gained, trading at $104,400 and $2,590 respectively, while XRP lagged by 5.3%.
Legal Backdrop: Why the Settlement Was Rejected
Judge Torres affirmed the SEC’s $125 million fine, citing Ripple’s "reckless disregard" for securities laws and imposing an injunction against future violations. Ripple plans to appeal, but the prolonged litigation may delay XRP’s recovery.
XRP Derivatives Data: Traders De-Risk Amid Uncertainty
Key metrics from Binance and OKX highlight shifting sentiment:
- Open Interest: Down 6% ($160M outflow).
- Long/Short Ratio: Binance’s ratio at 0.93, reflecting reduced bullish bets.
- Options Activity: Open interest plunged 59% to $516K despite a 4.6% volume uptick.
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Will XRP Recover in 2025?
Analysts predict prolonged consolidation below $3 until regulatory clarity emerges. Risks include:
- Underperformance vs. BTC/ETH: XRP’s weaker correlation with the broader rally.
- Liquidation Pressure: Further drops could trigger cascading sell-offs if $2.40 breaks.
FAQs
Why did XRP price drop?
The SEC settlement rejection reignited regulatory fears, prompting trader exits.
What does the $160M open interest withdrawal mean?
Traders are reducing leveraged positions to avoid volatility from ongoing legal battles.
Can XRP rebound soon?
Recovery hinges on Ripple’s appeal or a technical bounce from $2.40. A break above $2.60 could signal upside.
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Conclusion: Navigating XRP’s Volatility
With litigation extending into 2025, XRP’s near-term trajectory depends on:
- Legal outcomes: Appeal success or settlement revisions.
- Market sentiment: Broader crypto rally participation.
- Technical levels: Holding $2.40 to avoid deeper corrections.
Disclaimer: This content reflects market conditions and author analysis. Conduct independent research before investing.
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