Why Ripple Stock Climbed 11% on Tuesday

A cryptocurrency recovery was great for Ripple (CRYPTO:XRP) stock, but an incoming SEC decision also allowed the crypto to lead the charge.

Amy Legate-Wolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. Amy’s work can be found regularly on the Financial Post and MoneyWise Canada. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog Finley, and travel. Follow Amy on LinkedIn.

Published February 8, 2022 12:30 pm EST

| More on: XRP

XRP (CRYPTO:XRP) has led the way so far this week, as cryptocurrency has finally started to rise after its January lows. Ripple stock climbed past the dollar market as of Tuesday, up 23% since the beginning of the week and 11% on Tuesday.

What happened?

Part of this was due to the rise in cryptocurrency in general. This came down to the substantial increase in United States jobs during the month of January — higher than expected. But in the case of Ripple stock, it went beyond the job announcement.

Ripple stock made significant headway in terms of its case against the U.S. Securities and Exchange Commission (SEC). This news alone allowed it to surpass other crypto to become the sixth-largest cryptocurrency overnight. This allowed Ripple to surge to $1.15, before coming back slightly to $1.05 as of writing. Of course, the real hurdle will be whether it surpasses the US$1 mark.

So what?

What was the positive news to make things climb so quickly? The court case quested whether Ripple tokens were issued and sold as an unlicensed security. Founder and chairman of Ripple stock Chris Larsen argued to dismiss the case. He stated that documents sent back in 2012 did not offer prospective investors any of the currency or investment contracts.

The SEC has been coming down on cryptocurrencies like Ripple to make sure there weren’t under-the-table deals made before these companies came on the market. Now, it looks like the case could come to an end, and that could send Ripple stock climbing even higher.

Now what?

If the cryptocurrency climbs too high, too quickly, there is likely to be a fall back. This can especially be seen by its relative strength index of 69. This is technically not in overbought territory, but the company did reach that point when shares hit $1.15.

That being said, the end of a court case is usually signs of bullish expectations for any tech stock. So, this could be the start of bull territory for Ripple stock in the near future. The cryptocurrency remains one of the most popular, and as the rebound continues, this company could certainly surpass US$1 this week.