On Thursday, XRP posted its best daily percentage gain in three months as the US Securities and Exchange Commission dropped securities violation charges against top executives at fintech company Ripple.
XRP, the world’s fifth-largest digital asset, rose 6.5% to 52 cents and hit a high of 53 cents before falling to 51 cents at press time, CoinDesk data shows.
In a lawsuit filed Thursday, the SEC agreed to dismiss allegations against Ripple CEO Brad Garlinghouse and co-founder Chris Larsen. The move comes months after the Southern District of New York said Ripple’s offer and sale of XRP on digital asset exchanges did not amount to offers and sales of investment contracts, as alleged by the SEC.
About three years ago, the SEC accused Ripple Labs, which has close ties to XRP, of violating securities laws by making $1.3 billion through XRP sales to investors. The legal issues kept XRP under pressure even as the broader market boomed.
Spot market buyers are likely to have driven XRP’s rally on Thursday. Spot-driven rallies are said to be more sustainable than those led by leveraged traders.
Data from Coinalyze shows that the cumulative volume delta (CVD) on spot exchanges increased along with the XRP price, indicating a net inflow into the market. Meanwhile, the CVD remained unchanged in the stablecoin and coin-margin futures markets.
A rising CVD means there are more buyers active, while a negative line means there are more sellers.
Although impressive, Thursday’s rise was not enough to end a two-month price consolidation between 49 and 45 cents.
Range play, which represents the breakdown in volatility, often paves the way for a big move in one direction or the other. The logic here is that the market builds up energy during consolidation, which is then released in the direction where the range is eventually broken.