Market Wrapping: Bitcoin Rangebound as XRP Plummets After SEC Lawsuit

Bitcoin’s price continues to trade below $ 24,000 as legal action against Ripple Labs rushes the XRP market. Bitcoin is the only asset in the CoinDesk20 with a positive 24-hour return at 4 pm ET.

The price of bitcoin has been bouncing between $ 22,000 and $ 24,000 since Friday.

Despite its monster rally through the fourth quarter of 2020, bitcoin volatility has remained low. There has been a slight rise in December as bitcoin continues to set record highs, but 180-day volatility has been sitting at its lowest levels since February 2017, per data from Coin Metrics.

Guess anyone is the next price. But on Twitter, Ki Young Ju, CEO of cryptocurrency data provider CryptoQuant, divided its bullishness, saying, “BTC will cut $ 25,000 without re-testing $ 21,000.”

Part of the reason for Ju’s prediction is the large outflows from Coinbase, which could be considered transfers to Coinbase’s cold store following new over-the-counter deals for institutional clients.

Sharing Ju’s market forecast, Zoran Scekic, a managing partner at cryptocurrency trading company Zorax Capital, also took to Twitter, calling bitcoin market conditions a “consolidation or up” trend. Regardless of its name, bitcoin’s current trend has resulted in over 200% returns to date, with earnings of around 20% so far in December.

Along the way, bitcoin’s relationship with traditional markets has continued to weaken, according to data from Coin Metrics, with the 90-day correlation between bitcoin and the S&P 500 stock index at its lowest level just before the market crash in March 2020.

Following news of the SEC lawsuit against Ripple, XRP investors are facing a very merry Christmas weekend. The fifth largest cryptocurrency by market capitalization hit more than 40% on Wednesday at 21:00 UTC (4 pm ET), trading hands around $ 0.27.

Ripple CEO Brad Garlinghouse warned Monday that the U.S. Securities and Exchange Commission (SEC) plans to file a lawsuit, according to previous CoinDesk reports. Sure enough, Tuesday afternoon the SEC filed a suit alleging that Ripple Labs violated federal securities laws while selling the XRP cryptocurrency to retail consumers.

Some organizations are taking a wait-and-see approach to this news, such as Ripple partner MoneyGram, who said it has yet to see any “negative impact” on its business arrangements with Ripple following the SEC’s lawsuit.

But some investors are not so patient. Cryptocurrency currency manager Bitwise liquidated its XRP, worth $ 9.3 million, following news of the SEC’s lawsuit. “The Fund liquidated its position and reinvested the profits in other portfolio assets,” Bitwise wrote to clients.

Digital assets on the CoinDesk 20 are down on Wednesday. Bitcoin is the only asset of the index with a positive 24-hour return at 21:00 UTC (4:00 pm ET), indicating a gain of 0.4%.