Ripple’s XRP stole the spotlight of the cryptocurrency market after the former chairman of the U.S. Commodity Futures Trading Commission (CFTC) Christopher Giancarlo affirmed that it does not qualify as a security. Instead, the so-called “Crypto Dad” argues that the cross-border remittances token can be considered a currency like any other sovereign currency.
“Ultimately, under a fair application of the Howey test and the SEC’s presently expanding analysis, XRP should not be regulated as a security, but instead considered a currency or a medium of exchange. The increased adoption of XRP as a medium of exchange and a form of payment in recent years, both by consumers and in the business-to-business setting, further underscores the utility of XRP as a bona fide fiat substitute,” said Giancarlo.
The former CFTC commissioner’s remarks may hint that the Securities and Exchange Commission (SEC) could be close to finally clarify the legal status of XRP. This could be the reason why the number of the cryptocurrency’s whales is skyrocketing.
XRP Whales Fill Their Bags Massively
Santiment’s holder distribution chart reveals that the large investors behind XRP seem to be preparing for something big. The number of addresses with millions of dollars in XRP, colloquially known as “whales,” is rising substantially.
Indeed, the number of addresses with over 10,00,000 XRP has done nothing but shoot up since the March market meltdown. Santiment shows that currently, 473 addresses are holding over $2 million worth of the cryptocurrency, which is the highest number ever recorded.
Although Giancarlo is no longer part of the CFTC, his remarks carry a lot of weight since he is a reputable figure within the U.S. regulatory agencies, according to Mike Dudas, the head of The Block. But the former CFTC commissioner currently serves as a counsel to Ripple Labs and “relied on certain factual information provided by Ripple” for his statement.
For this reason, Giancarlo’s comments must be taken with a grain of salt despite the bullish activity seen among large investors.
Hovering Within a No-Trade Zone
From a technical perspective, the cross-border remittances token appears to be consolidating within a narrow trading range. Its price action is contained between the $0.186 support level, and the $0.212 resistance over the past month.
This stagnation phase forced the Bollinger bands to squeeze on XRP’s 1-day chart. Squeezes are indicative of periods of low volatility and are typically succeeded by wild price movements. The longer the squeeze, the higher the probability of a strong breakout.
The inability to determine the direction of the next major price movement makes the area between the lower and upper band a reasonable no-trade zone.
A spike in demand or supply that pushes XRP out of this critical zone will determine where it is headed next.
In the meantime, investors must wait for a clear break of the support or resistance levels previously mentioned before entering any trade. This strategy can help minimize losses and expand opportunities for sustainable profits.
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