Ripple XRP registered a significant pullback in the last 24 hours, highlighting some price correction after its parabolic run in the last few days. While XRP’s rally has mainly been as a result of the bullish sentiments in the global crypto market, the expectations of a favorable outcome in its legal battle with the SEC is also fueling buyer sentiment.

XRP is currently trading at $1.21 following a 5.28% drop in the last 24 hours, which saw it drop after previously peaking at $1.29. The cryptocurrency dropped as low as $1.12 today but then recovered to its current price level, confirming that the bulls are still in control. The price action was due to some selloffs as some investors take profit from the recent gains.

Source: Binance

Why XRP is poised to continue rallying

XRP’s current price drop also reflects the overbought condition according to the RSI, thus paving the way for a cooling off of the price. There are numerous factors to consider as far as the XRP’s performance in the next few days or weeks is concerned. Right now the biggest price influence is the favorable bullish sentiment in the overall market.

The other major influence for the cryptocurrency is the lawsuit filed by the SEC which recently yielded a win for Ripple after the regulatory authority failed to provide documents as per the judicial directive. This act was translated as a lack of adequate evidence to back their lawsuit against Ripple, thus fueling investor confidence. The lawsuit has been detrimental to XRP’s performance in the last few months because it greatly reduced investor confidence, especially as many of the clients they are targeting are public companies that cannot be partnering with a firm that is in breach of the law. This cautionary approach caused the cryptocurrency to drop as low as $0.5 in June. A far cry from its $1.96 peak just one month before.

Fortunately, the SEC does not seem to have a watertight case against Ripple Labs and this has been a major reason why confidence in the cryptocurrency has been renewed in the last few weeks. Experts believe that the legal battle is drawing to a close, and the implications of a win for Ripple Labs will have a huge impact on the XRP price.

Unpacking XRP’s potential upside

Ripple Labs has huge plans to roll out more On-Demand Liquidity corridors across the world after the lawsuit is concluded. The company might pursue partnerships with major banks in the world to roll out faster cross-border remittance services and there is also the likelihood that Ripple Labs will go public sometime soon. Such a move will make it more attractive to the financial industry and such events will be catalysts that will fuel more demand for XRP.

XRP will have an easier time gaining value if such events happen during a bull run such as the ongoing one. Unfortunately, it is still not clear how much those events influence the demand for XRP, especially from the financial industry. Heavy demand might lead to drastic increases in market cap, in which case the value of XRP would also benefit significantly.

A continued overall crypto market rally combined with a favorable outcome in the legal battle and Ripple Labs’ goals with ODL will likely provide enough momentum to potentially cross above $2. Such an outcome is possible within the next few months.