Market Wrap: Bitcoin Rangebound as XRP crashes after SEC lawsuit

Bitcoin’s price continues to trade below $ 24,000 as lawsuits against Ripple Labs rattled the XRP market. Bitcoin is the only asset in CoinDesk20 with a positive 24-hour return from kl. 16 ET.

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

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

Where the price goes next is anyone’s guess. But on Twitter, Ki Young Ju, CEO of cryptocurrency data provider CryptoQuant, divided his bullishness and said: “BTC will break $ 25,000 without testing again $ 21,000.”

Part of the reason for Ju’s prediction is the large outflows from Coinbase, which can be considered transfers to Coinbase cold stores following new over-the-counter offers to institutional customers.

Sharing Jus’ market outlook, Zoran Scekic, managing partner of cryptocurrency trading firm Zorax Capital, also took to Twitter, calling bitcoin’s market conditions a “consolidation or up” trend. Whatever it is called, bitcoin’s current trend has resulted in over 200% year-to-date returns with an increase of approx. 20% so far in December.

Along the way, bitcoin’s correlation with traditional markets continues to weaken per capita. Data from Coin Metrics with the 90-day correlation between bitcoin and the S&P 500 stock index at its lowest level since just before the market crash in March 2020.

Following the news of the SEC lawsuit against Ripple, XRP investors are facing a very merry Christmas weekend. The fifth largest cryptocurrency by market value crashed more than 40% on Wednesday from 1 p.m. 21:00 UTC (16:00 ET) and traded hands around $ 0.27.

Ripple CEO Brad Garlinghouse warned Monday that the U.S. Securities and Exchange Commission (SEC) was planning to file a lawsuit, per. Prior CoinDesk reporting. Sure enough, the SEC filed a lawsuit Tuesday afternoon alleging that Ripple Labs violated federal securities laws by selling 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 not yet seen any “negative impact” on its business deals with Ripple after the SEC lawsuit.

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

Digital assets on CoinDesk 20 are down Wednesday. Bitcoin is the index’s only asset with a positive daily return per. 21:00 UTC (16:00 ET) and reports a gain of 0.4%.