XRP slides as Paul Atkins’ “conflict of interest” sparks $220M market exodus

Source Cryptopolitan

Ripple (XRP) experienced heavy selling pressure this weekend, coming close to dropping below the critical $2 mark.

This meltdown has translated into some $220 million in market outflows—amid what appears to be increasing anxiety over U.S. Securities and Exchange Commission (SEC) nominee Paul Atkins. ​

Paul Atkins’ crypto holdings spark scrutiny

Atkins, who served as an SEC commissioner from 2002 to 2008, is a proponent of a lighter regulatory approach. President Donald Trump nominated him, and he has come under scrutiny for his significant financial interests in the crypto sector, including between $2 million and $6 million in crypto-related assets. Such holdings include stakes in crypto custodian Anchorage Digital, tokenization firm Securitize, and crypto investment firm Off the Chain Capital.

During his confirmation hearing in the Senate, lawmakers, including Sen. Elizabeth Warren, zeroed in on potential conflicts of interest related to Atkins’ extensive background as a regulatory adviser to major financial institutions, including digital asset companies.

Senator Warren expressed concerns that Atkins’ former clients, who paid him handsomely to help shape regulators such as the SEC, could unduly profit from his leadership. ​

While Ripple recently won a landmark legal battle against the SEC, Atkins’ confirmation process has raised new questions about the long-term regulatory environment for crypto.

These events have been met with some significant volatility in the crypto market. XRP fell to $2.06 earlier today before bouncing back to $2.15 as cautious traders remain unsure of the regulatory landscape. 

Traders weigh the risks of stricter crypto regulations

Traders fear that if they block the appointment of Atkins to the SEC Chair position, a more crypto-unfriendly successor could slide into the position instead. This may result in stricter regulations, postponing or even rejecting XRP and other altcoin ETFs getting approved.

According to data from Polymarkets, the odds of an XRP ETF being approved before July 31 have declined from 35% to 28% since the scrutiny surrounding Atkins began.

XRP slides as Paul Atkins’ “conflict of interest” sparks $220M market exodus.
Source: Polymarket

XRP open interest, one of the most essential indicators for futures market activity, has reduced from $1.6 billion to $1.48 billion in just 10 days; this $220 million reduction in open interest, based on data shown by CryptoQuant, gives proof of lost confidence in a rapidly upcoming XRP recovery.

When traders exit their positions en masse, they either take profits or work to limit their losses to stanch further damage. This also suggests that most players are betting that an extension of selling pressure is likely unless the regulatory landscape radically changes for the better.

The outflows in derivatives are a pretty obvious sign of increasing uncertainty. The uncertainty of the near-term price direction leaves a lack of conviction to make anyone bet on a comeback.

Bearish momentum pushes XRP toward a drop below $2

According to technical indicators, XRP risks sliding below the key $2 support area. The token faces strong resistance at $2.41 (the 50-day Simple Moving Average) and $2.51 (the 100-day SMA).

If XRP loses that level, you would expect it to fall further to $1,50, which is a psychological level. A break below $2 could trigger panic selling, pushing prices down to $1.80.

Sustained bearish momentum could even see XRP testing lower support levels in the weeks ahead. Otherwise, a move to the upside would require a breakout above $2.41. If that occurs, XRP can rally to $2.60 and the 100-day SMA. However, given the current market sentiment and regulatory uncertainty, a significant surge in buying volume would be necessary to sustain such an upward move.

As the confirmation process for the SEC chair continues, market participants are closely monitoring the situation. Atkins has committed to sell off all of his financial holdings that would otherwise pose a conflict of interest, including those of his consulting firm, Patomak Global Partners.

Investor confidence still remains cautious, as many are biding their time, waiting for clearer regulatory signals before committing more funds to XRP and the wider cryptocurrency market.

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Disclaimer: For information purposes only. Past performance is not indicative of future results.
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