XRP price dropped over 4% to $2.105 following a pivotal legal setback for Ripple Labs. U.S. District Judge Analisa Torres rejected the company’s proposed $50 million settlement with the SEC, leaving in place a $125 million penalty for unregistered securities sales. The ruling has reignited market volatility and sparked renewed debate over XRP’s future trajectory.
While the immediate market reaction was bearish, Ripple’s legal team remains confident. The company’s Chief Legal Officer, Stuart Alderoty, reaffirmed that XRP’s status as a non-security for retail use remains intact despite the court’s decision. Still, investors are now bracing for potential downside pressure as uncertainty lingers.
The Legal Ruling and Its Immediate Impact
On June 26, 2025, Judge Torres dismissed Ripple’s joint motion with the SEC to settle part of the long-running lawsuit, calling the filing “procedurally improper.” This means the $125 million civil penalty—originally imposed for the sale of $1.3 billion worth of unregistered XRP tokens—remains enforceable while the case proceeds through the appeals process.
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The market responded swiftly. XRP fell 3.3%, settling around $2.105 on major exchanges. Trading volume spiked as traders reacted to the news, reflecting heightened sentiment sensitivity to legal developments.
Despite the setback, Ripple maintains its core legal argument: XRP is not a security when sold to retail investors. Alderoty emphasized this point in a public statement:
“Either way, XRP’s legal status as not a security remains unchanged. In the meantime, it’s business as usual.”
Legal expert and pro-XRP advocate John E. Deaton echoed cautious optimism:
“Although I believed she would ultimately grant the indicative ruling, I can’t say I’m shocked.”
This suggests that while the settlement bid failed, the broader legal framework still supports Ripple’s position on XRP’s classification—a critical distinction for long-term investors.
XRP Price Outlook: Bullish vs Bearish Scenarios
After more than 205 days of consolidation, XRP has formed a well-defined value range between $2.07 and $2.54. This zone represents where 70% of trading volume has occurred, making it a strong indicator of market equilibrium.
Key Support Levels to Watch
The immediate support level sits at $2.07**, just above the psychological **$2.00 mark. Holding this level is crucial—if buying pressure returns here, it could signal resilience and pave the way for recovery.
Conversely, a breakdown below $2.07 may trigger further selling. Immediate downside targets include:
- $1.95 – a previous short-term floor
- $1.61 – a historically strong demand zone
- $1.47 – the most critical support level
At $1.47, buyers previously stepped in during prior sell-offs, fueling a near-doubling of price within nine days. Should panic selling accelerate due to prolonged legal uncertainty, this level could become the next battleground for bulls.
Bullish Rebound Potential
On the upside, a bounce from current levels could ignite a rally toward $2.406**, the Point of Control (POC)—the price with the highest traded volume over the past 205 days. A move beyond that could test the upper end of the consolidation range at **$2.54.
Longer-term resistance looms at $3.00, a level many analysts consider a logical profit-taking zone for traders.
Market Context: Geopolitical Tensions and Founder Activity
Recent market dynamics have been influenced by more than just litigation. Ripple co-founder Chris Larsen broke a 14-year public silence amid rising geopolitical tensions between Iran and Israel—an event that briefly boosted risk appetite for alternative assets like XRP.
However, such macro-driven rallies are often short-lived when fundamental headwinds persist. With the SEC case still unresolved and appeals pending, traders must balance sentiment-driven moves against structural risks.
Frequently Asked Questions (FAQs)
Why did XRP price drop recently?
XRP fell after Judge Torres rejected Ripple’s $50 million settlement proposal, maintaining a $125 million penalty and prolonging legal uncertainty.
Does this ruling change XRP’s status as a security?
No. Ripple’s CLO confirmed that XRP remains classified as a non-security for retail sales, consistent with prior court rulings.
What happens if XRP breaks below $2?
A breakdown could lead to retests of key supports at $1.95 and $1.61. If selling pressure intensifies, $1.47 becomes the next major level to watch.
Can XRP recover and rally higher?
Yes—defending $2.07 could trigger a 16% rally toward $2.406 or even $2.54, especially if institutional demand returns.
How does this affect Ripple’s business operations?
Legally, Ripple must continue fighting the SEC’s enforcement actions. Operationally, the company continues expanding partnerships and product development globally.
Is now a good time to buy XRP?
Investors should assess risk tolerance and conduct independent research. While downside risks exist, long-term holders may view dips as accumulation opportunities.
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Final Thoughts: Navigating Volatility With Strategy
The rejection of Ripple’s settlement bid is undoubtedly a setback—but not a fatal one. The core legal argument about XRP’s classification remains unchallenged by this procedural decision. However, markets thrive on certainty, and prolonged litigation inherently breeds volatility.
Traders should monitor volume patterns near $2.07 and watch for signs of accumulation or distribution. Meanwhile, long-term investors may focus on macro adoption trends, Ripple’s ongoing global expansion, and potential regulatory shifts in 2025.
As always in crypto, timing matters—but so does conviction backed by data.
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