XRP experienced a significant price drop, declining by 4% following a major legal development in the ongoing Ripple vs. SEC lawsuit. The decline occurred after a federal court rejected Ripple's proposed $50 million settlement, keeping a larger $125 million penalty intact. This ruling has introduced renewed uncertainty into the market, affecting investor sentiment and short-term price action.
Despite the sell-off, Ripple's Chief Legal Officer, Stuart Alderoty, clarified that XRP’s legal status as a non-security for retail sales remains unchanged. This key distinction offers some reassurance to the community, even as the legal process continues.
This article explores the court’s decision, its market impact, and potential price scenarios for XRP. We also address common questions to help investors better understand the situation and navigate future volatility.
Court Rejects Ripple’s Settlement Motion
On June 26, 2025, a federal judge denied Ripple’s motion to settle with the SEC for $50 million, labeling the proposal as “procedurally improper.” The decision means that the previously established penalty of $125 million remains in effect. This penalty relates to Ripple’s alleged unregistered sales of XRP totaling approximately $1.3 billion.
The court’s rejection extends the legal timeline, as the case is now expected to proceed through appeals. This introduces prolonged regulatory uncertainty, which often triggers negative short-term reactions from investors.
Following the announcement, XRP’s price fell to $2.105, reflecting a decline of over 3% within a short period. Market participants responded to the unexpected legal setback, though many long-term holders remain focused on the broader implications of the case.
How the Market Reacted
The immediate market response was a classic risk-off move. Trading volume spiked as sellers dominated the order book, pushing XRP below key short-term support levels. Social media sentiment and crypto news outlets amplified the reaction, contributing to the downward momentum.
However, it’s worth noting that the decline was not entirely chaotic. XRP has been trading within a consolidation range between $2.07 and $2.54 for over 200 days. Approximately 70% of recent trading activity occurred within this zone, making it a significant area for both buyers and sellers.
Despite the negative news, the token’s structure remains technically intact as long as it holds above the $2.07 support level. A sustained break below this threshold could signal deeper losses ahead.
XRP Price Analysis: Bullish and Bearish Scenarios
Bearish Outlook
If selling pressure continues and XRP breaks below the $2.07 support level, the next key supports lie at $1.95 and $1.61. These levels have historically attracted buyer interest, leading to price bounces.
Should these levels fail to hold, the next major support is found near $1.47. This price point previously acted as a consolidation zone before XRP rallied significantly over a short period. A move to this area would likely reflect heightened panic among investors.
Bullish Scenario
If XRP stabilizes above $2.07 and begins to recover, the first major resistance is located at $2.406. This level represents the Point of Control (POC)—the price at which the highest trading volume occurred over the past several months.
A break above the POC could open the door for a retest of the range high at $2.54. Beyond that, the $3.00 level serves as a psychological barrier where many investors may consider taking profits.
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Legal Context and Market Impact
It’s important to understand that this court ruling does not alter XRP’s classification as a non-security in retail trading contexts. This clarification from Ripple’s legal team helps mitigate some of the structural fears that investors may have.
The ongoing case primarily concerns institutional sales of XRP and related penalties. While the outcome remains important for Ripple as a company, it does not directly change the regulatory status of XRP tokens held by retail investors.
This legal update follows other recent market-moving events, including public statements from Ripple’s co-founder after a long period of silence. Broader macroeconomic factors, such as geopolitical tensions, have also contributed to volatility within the cryptocurrency sector.
Frequently Asked Questions
Why did XRP price drop?
XRP fell after a federal judge rejected Ripple’s proposed $50 million settlement with the SEC. The decision maintains a $125 million penalty and extends legal uncertainty, causing nervous investors to sell.
Does this change XRP’s legal status?
No. Ripple’s Chief Legal Officer confirmed that XRP remains a non-security in the context of retail sales, consistent with earlier court rulings.
What is the next key support for XRP?
The crucial support level is $2.07. If broken, XRP could decline toward $1.95 or $1.61. The major support to watch in a deeper sell-off is $1.47.
Can XRP recover soon?
If buyers defend the $2.07 support zone, a rebound toward $2.54 is possible. However, much depends on broader market sentiment and further legal developments.
Should investors be worried?
While short-term volatility is expected, the core legal status of XRP remains unchanged. Investors should monitor key support levels and consider their risk tolerance.
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Conclusion
The recent court ruling against Ripple introduced renewed selling pressure in XRP markets, but it did not change the token’s fundamental legal standing. While short-term volatility may continue, the established trading range between $2.07 and $2.54 remains technically relevant.
Investors should watch for a hold above $2.07 for signs of strength, or a break below for further downside. As the legal process evolves, staying informed with accurate information and maintaining a disciplined trading approach is essential.
Market participants are advised to conduct their own research, use risk management tools, and avoid making decisions based solely on headlines.