The ruling from July 2023 that categorized XRP as a "non-security" in secondary market sales is facing challenges as two federal judges express doubts about applying the Howey Test to XRP. These judges suggest that XRP may potentially be considered an unregistered security.

Risks of Reversal, Legal Perspectives

Charles Gasparino, an American journalist and XRP expert, has pointed out an inconsistency in Judge Analisa Torres' use of the Howey Test. Gasparino believes that Judge Torres' ruling may be flawed and could be overturned.

Federal judges handling cases outside of Ripple are closely scrutinizing the Howey Test's application, which determines whether an asset is an investment contract and, consequently, a security. If the decision on the Howey Test is reversed, there is a chance that XRP may be reclassified as an unregistered security. Such a reclassification would not bode well for Ripple and XRP holders.

On the other hand, XRP advocate Bill Morgan disagreed with Gasparino's opinions. Morgan requested evidence to support Gasparino's assertion that judges harbored doubts about Judge Torres' decisions. Morgan emphasized the discrepancy between motions to dismiss and summary judgment decisions, suggesting Gasparino might lack sufficient evidence to support his claims.

Stuart Alderoty, Ripple's Chief Legal Officer, has expressed skepticism about the SEC's influence on legal proceedings, anticipating hurdles for the regulator as evidence unfolds in the Coinbase lawsuit.

Whale Accumulation

Despite ongoing legal proceedings, on-chain data shows that large XRP holders, referred to as whales, have been accumulating XRP. Information from Santiment reveals that whales holding between 10 million and 100 million tokens acquired an additional 190 million XRP tokens between March 27 and April 1. This indicates that whales might be purchasing during dips and expecting future price hikes.

Meanwhile, XRP's price has remained relatively stable between $0.9380 and $0.4226 for over 460 days but is currently trading above the crucial $0.60 mark. The Relative Strength Index (RSI) and Awesome Oscillator (AO) indicators suggest a bullish trend, hinting at possible price recovery.

Potential Price Recovery Scenarios

Despite legal uncertainties, there is hope for a price recovery in XRP. The target for recovery is the year-to-date high of $0.7440, approximately 16% higher than the current price of $0.6233. However, this recovery might be influenced by Bitcoin's price movement, as any correction in Bitcoin's price could have adverse effects on XRP and other cryptocurrencies.

In a downside scenario, XRP's price could drop to the low of $0.4853 recorded on January 28 or the weekly support level at $0.4117. This would signify a notable decrease from current levels and underline the potential risks associated with XRP's legal uncertainties.