Cardano Price Outlook: Hoskinson Suggests Ripple Case May Alter U.S. Securities Definition – What Impact Will This Have on ADA?

In the last 24 hours, the price of Cardano has stabilized, gaining 2.27%.

This increase follows remarks from Cardano CEO Charles Hoskinson regarding the reopened Ripple vs SEC case, which could potentially reshape the regulatory landscape for securities.

Today’s price movement signifies a recovery from last week’s market downturn caused by geopolitical issues, although Cardano is still down 14.32% since last Friday.

This upward trend is also mirrored by a 7.03% decline in trading volume, which now stands at $303.8 million, indicating that recent market fluctuations are starting to subside.

Could the SEC vs Ripple Case Replace The Howey Test?

The SEC has formally appealed its case against Ripple following a landmark ruling on August 7, where Ripple was mandated to pay a $125 million civil penalty, contending that the district court’s ruling contradicts established Supreme Court precedents and securities laws.

Ripple’s Chief Legal Officer Stuart Alderoty expressed on X that the SEC’s appeal was “disappointing, but not surprising.”

He characterized the lawsuit as “irrational” and “misguided” from the outset, noting that the court had already dismissed the SEC’s assertion that Ripple acted recklessly and that there were no claims of fraud, victims, or losses.

In an intriguing development, Charles Hoskinson, responding to Alderoty’s statement, proposed that the ongoing Ripple case might have the potential to replace the Howey Test.

This legal standard, established by the Supreme Court, is utilized to determine if specific transactions qualify as investment contracts under U.S. securities law.

While Hoskinson’s comment may carry a hint of irony, it underscores an important consideration: the Howey Test, created in 1946, predates the emergence of digital assets and cryptocurrencies by several decades.

Cardano Price Analysis: Implications for ADA

Cardano could gain significantly from the potential ramifications of a new regulatory framework, particularly given the SEC’s previous classification of Cardano as an unregistered security during the 2023 lawsuit against Binance.

Although the SEC later retracted these claims, it could entirely remove Cardano from the SEC’s regulatory scrutiny. This would bolster investor confidence, alleviating the immediate concern of SEC oversight.

Cardano’s recent decline has reinforced a bullish falling wedge pattern, indicating increasing volatility as the asset navigates a phase characterized by fear, uncertainty, and doubt (FUD).

ADA / USDT price chart, falling wedge pattern. Source: Binance.

Significant challenges remain for a potential breakout, and a detailed examination of the technical indicators presents a mixed outlook.

Most notably, the Relative Strength Index (RSI) has returned to negative territory, hovering around 40. While it has moved away from oversold conditions, it still reflects a bearish inclination.

The Chaikin Money Flow (CMF) has shown slight improvement, currently at -0.015, but it continues to signal ongoing selling pressure. This metric highlights the persistent caution among investors, as capital outflows still exceed inflows.

However, the MACD line, which previously maintained a strong position above the signal line, is losing momentum. This change indicates that bearish sentiment is gaining traction, making sustained upward movement more difficult in the short term.

Given the prevailing negative technical conditions, a retracement back to lower support appears likely, targeting the $0.3120 level.

On a more optimistic note, if Cardano can maintain its upward trajectory, the next significant challenge would be the 200EMA. Surpassing this resistance would confirm a breakout from the pattern and pave the way for a sustained advance towards the resistance at $0.6660.

This New Opportunity Holds Higher Gains Potential

While a new regulatory framework would be favorable for the Cardano price, it is improbable that such developments will occur in the immediate future.

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