Ripple's XRP Faces Price Pressure as SEC Appeal Triggers Decline in Profitability

Ripple's XRP has been on a downward trend since early October. This decline started after the U.S. Securities and Exchange Commission (SEC) announced it would appeal a federal judge's ruling regarding the payments service provider.

As a result of this price drop, the percentage of XRP's supply held in profit has hit its lowest point since July. Let's take a closer look at what this means for the token's value.

On October 2, the SEC filed a notice of appeal. They aimed to overturn the court's decision that stated programmatic sales of XRP to retail investors did not violate securities laws. Then, on October 10, the SEC submitted its appeal. This prompted Ripple to announce plans for a cross-appeal of its own.

These developments have put downward pressure on XRP's price over the past month. Right now, XRP is trading at $0.50, which is a 6% drop since October 2.

This price decline has led to a decrease in the percentage of XRP's supply held in profit. According to data from Santiment, this figure now stands at 70.4%. That’s the lowest it’s been since July 12. Just to give you some context, this metric was at 90% at the beginning of October, before the SEC's notice of appeal.

When the supply held in profit drops, it means fewer holders are currently making money compared to when they bought it. This often correlates with a price drop, as we’re seeing with XRP. As more holders face losses, selling pressure may increase, especially if they want to cut their losses.

XRP's declining Relative Strength Index (RSI) shows a steady increase in selling pressure. Currently at 38.77, this indicator suggests that selling activity is outpacing buying among traders.

The price drop has pushed XRP below a critical support level at $0.52. As of now, it’s trading at $0.50. With buying pressure fading, XRP risks further decline.

Fibonacci Retracement tool readings suggest that the altcoin might try to test the $0.46 support level. If buyers can’t defend it, XRP could plunge to its July 5 low of $0.38.

However, if market sentiment shifts from bearish to bullish, this negative outlook could change. If that happens, XRP may try to break above $0.52. A successful move past this level could set it on a path to trade above $0.60.