XRP, Dogecoin (DOGE) Prices Jump, Here’s What Led Significantly to Market Recovery

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XRP, Dogecoin and several other cryptocurrencies are posting a rebound after the market witnessed selling pressure yesterday and the day before as a result of the SEC lawsuits against the two biggest exchanges, Coinbase and Binance.

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On Monday, the crypto industry received the shocking news that Binance and its CEO, Changpeng “CZ” Zhao, had been sued by the United States Securities and Exchange Commission (SEC).

The SEC announced a second lawsuit against Binance rival Coinbase on Tuesday and, later in the day, requested that a federal court grant a temporary restraining order to freeze assets relating to Binance.US.

Surprisingly, the crypto market, led by Bitcoin, shook off the SEC’s enforcement action to post a rebound, with several cryptocurrencies seeing gains at the time of writing. 

Dogecoin, the eighth largest cryptocurrency, clocked a 5% increase. However, it seems to be erasing some of these gains, as it is up 3.85% in the last 24 hours to $0.069. 

XRP, the sixth largest cryptocurrency by market capitalization, also rose 5% but then seemed to have erased some of its gains and is up 3.65% in the last 24 hours to $0.528.

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The largest cryptocurrency by market capitalization, Bitcoin (BTC), has almost completely recovered from yesterday’s losses and is currently up 3.4% on the day, trading at $26,646. 

Likely reason for surprising rebound

On-chain analytics firm Santiment suggests what might have led to the surprising rebound: contrarian traders took advantage of bearish market sentiment. It notes that shortly after the crowd gave up, prices began to rise. 

“As there was increased crowd buy-the-dip interest as crypto prices plummeted yesterday, it was shortly after the crowd gave up when prices began to soar. Avoiding the mainstream hype is a typical strategy that contrarian traders can take advantage of,” Santiment analysts wrote. 

It is unclear if what we are seeing is a dead cat bounce or indications of a resilient market undeterred by the status quo.

At the time of writing, several cryptocurrencies were erasing gains, while others had already plunged into the red.