Ripple (XRP) has formally entered a new cycle by climbing above the 50 Week EMA. The XRP/BTC weekly chart shows that Ripple (XRP) is all set to print its four weeks of long candles that could take the price to a new all time high. This time, the green candles in succession might see a red candle in the middle but that does not mean that the price may not reach a new all time high. The reason the price could see a red candle in the middle of a series of long green candles is that the RSI is already nearing overbought levels while the price has not moved in the same way as expected during a Ripple (XRP) cycle.
The past few weeks have been tough for Ripple (XRP) investors as Ripple (XRP)’s lawsuit over its security status keeps haunting XRP holders like a Frankenstein. It has become something that Ripple (XRP) can neither spit nor swallow. Here’s the thing. Ripple (XRP) fails the Howey test just like a ton of other cryptocurrencies would when you put them to it. The Howey test used to determine whether something is a security or not has two straightforward clauses. The first clause states that it should be a transaction of money. The second clause states that the investor intends to profit off rising value of the asset bought. So, if you are XRP buyers, both of these apply to you. You bought XRP with money and you are holding XRP because you think at some point you might be able to sell it for a profit.
These are two straightforward clauses that would apply to most cryptocurrencies. However, there is a third clause that applies only to certain cryptocurrencies like Ripple (XRP). It states that there should be a central body directly in charge of the investment. In other words, the value of your XRP tokens would depend on their actions. In this case, it is Ripple (the company). If they sign more partners and get more people to use XRP, you can expect those actions to impact the price of XRP. Now, we do not know for sure where this lawsuit is headed but Ripple (the company) is trying hard to push the case to Federal Court as they believe they have a higher chance of winning there. Howey vs. United States has served as an important precedent in most legal proceedings throughout history.
Chart for XRP/USD (1W)
However, there is no doubt that cryptocurrencies like Ripple (XRP) need to be dealt with through more sophisticated laws and regulations instead of applying the old Howey test to it. This is because tokens are a whole new asset class which does not guarantee a stake in the company whereas buying stocks mean buying shares of a company. So, if both are different things, then maybe we need different laws and regulations for both. Cryptocurrencies like Ripple (XRP) would definitely benefit from regulation. Ripple CEO, Brad Garlinghouse has stated many a time that Ripple welcomes regulation. However, that regulation should be aimed at enabling the cryptocurrency market to grow rather than creating impediments for innovative projects.