XRP and a Return to $0.50 at Risk on SEC v Ripple Silence and Fed Fear

Key Insights:

• On Saturday, XRP joined the broader crypto market in the red, falling by 0.37% to end the day at $0.4783.
• A lack of SEC v Ripple updates left recessionary jitters and Fed Fear to test buyer appetite.
• The technical indicators turned more bullish, signaling a return to $0.50.

On Saturday, XRP fell by 0.37%. Partially reversing a 2.81% gain from Friday, XRP ended the day at $0.47830. Despite the bearish session, XRP avoided sub-$0.47 for the first time since April 18.

A bullish start to the day saw XRP rise to an early high of $0.48686. XRP came within range of the First Major Resistance Level (R1) at $0.4871 before falling to a late afternoon low of $0.47166. However, steering clear of the First Major Support Level (S1) at $0.4684, XRP retested resistance at $0.48 before easing back to end the day at $0.47830.

ChinaBank and Ripple Quarterly Report Offset Recession and Fed Fear

It was a quiet start to the weekend, with no updates from the SEC v Ripple case to influence buyer appetite. The lack of updates left XRP on the back foot, with recessionary jitters and Fed Fear leaving investors on the sidelines. However, the crypto news wires also drew interest as investors monitored updates on First Republic Bank (FRC).

The increasing risk of another US bank collapse amidst a deteriorating macroeconomic environment weighed on investor sentiment. However, another US bank collapse could force the Fed to hit the policy pause button.

Depositors facing the risk of losing deposits above $250,000 are likely to turn to the crypto market for sanctuary, another crypto-positive.

The Ripple quarterly report from Thursday continued to deliver support, with impressive numbers resonating. News of a partnership between ChinaBank and Qatar National Bank to support remittances from Qatar to the Philippines using RippleNet also cushioned the downside.

The Day Ahead

Investors should continue to monitor SEC v Ripple case updates, with US regulatory activity and lawmaker chatter needing consideration. However, Investors should track Binance and Coinbase (COIN)-related news.

Updates from US regulators on First Republic Bank will also move the dial. US regulators and Wall Street are attempting to avoid the collapse of another US bank and avert a banking crisis.

With no US economic indicators or corporate earnings for investors to consider, the Amazon.com (AMZN) warning and recessionary fear will likely continue to resonate.

This morning, private sector PMI numbers from China were disappointing. The NBS Manufacturing PMI fell from 51.9 to 49.2, with the Non-Manufacturing PMI declining from 58.2 to 56.4. The contraction in the manufacturing sector was significant, with the post-COVID recovery running out of steam.

Investors will begin to focus on the Fed interest rate decision on Wednesday. While the markets have baked in a 25-basis point interest rate hike, uncertainty toward the June policy decision lingers.

XRP Price Action

At the time of writing, XRP was down 0.74% to $0.47476. A bearish start to the day saw XRP fall from an opening price of $0.47809 to a low of $0.47452.

Technical Indicators

Resistance & Support Levels

XRP needs to move through the $0.4789 pivot to target the First Major Resistance Level (R1) at $0.4862 and the Saturday high of $0.47686. A return to $0.48 would signal a bullish session. However, SEC v Ripple chatter and the crypto market news must support a breakout.

In the case of an extended rally, XRP would likely test the Second Major Resistance Level (R2) at $0.4941 and resistance at $0.50. The Third Major Resistance Level (R3) sits at $0.5093.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.4710 in play. However, barring a crypto event-fueled sell-off, XRP should avoid sub-$0.4650 and the Second Major Support Level (S2) at $0.4637. The Third Major Support Level (S3) sits at $0.4485.

The EMAs and the 4-hourly candlestick chart (below) sent mixed signals.

At the time of writing, XRP sat above the 50-day EMA, currently at $0.47333. The 50-day EMA narrowed to the 200-day EMA, while the 100-day EMA closed in on the 200-day EMA. The EMAs delivered mixed signals.

A move through the 200-day ($0.47746) and 100-day ($0.47988) EMAs would support a breakout from R1 ($0.4862) to target R2 ($0.4941) and $0.50. However, a fall through the 50-day EMA ($0.47333) and S1 ($0.4810) would bring S2 ($0.4637) into view. A fall through the 50-day EMA would send a bearish signal.