XRP at Risk of Profit Taking and Sub-$0.50 as Investors Await Court Rulings

Key Insights:

• On Thursday, XRP ended a five-day winning streak, falling 1.93% to end the day at $0.53229.
• A bearish crypto market session fueled by SEC Chair Gensler’s plans for the digital asset space led to the pullback.
• However, the technical indicators are bullish, signaling a return to $0.60.

On Thursday, XRP fell by 1.93%. Partially reversing a 5.60% gain from Wednesday, XRP ended the day at $0.53229. XRP saw a five-day winning streak end.

A mixed start to the day saw XRP fall to an early morning low of $0.52168. Steering clear of the First Major Support Level (S1) at $0.5096, XRP rose to a late morning high of $0.5573. However, falling short of the First Major Resistance Level (R1) at $0.5804, XRP fell back to sub-$0.53 before wrapping up the day at $0.53229.

XRP Investors Brush aside Intensifying Regulatory Scrutiny

It was a quiet Thursday, with no updates from the ongoing SEC v Ripple case to influence investor sentiment.

While there were no Court rulings for investors to consider, the SEC was in the spotlight for a second consecutive session.

Following the news of Patrick McHenry calling on SEC Chair Gary Gensler to deliver testimony on Capitol Hill, news broke of SEC Chair Gary Gensler calling on lawmakers to approve $2.4 billion in funding to bolster the regulation by enforcement approach to the digital asset space.

The news was bearish, with the broader crypto market also seeing red. The XRP pullback came despite the optimism of a Ripple victory in the SEC v Ripple case.

A Ripple victory will become even more vital as the SEC looks to increase its regulatory capabilities. US lawmakers could cut SEC powers and funding and stop an exodus of crypto-related firms from the US to more crypto-friendly jurisdictions.

Questions relating to the Howey Test, disagreements with the CFTC on whether cryptos are securities or commodities, failure to prevent the collapse of FTX, and the case against Ripple would draw plenty of interest. Anti-SEC lawmakers could even go for the jugular and bring up the Hinman Documents. Until now, the SEC has failed to shield the documents from the public.

However, with the hearing taking place on April 18, a lot can happen between now and the hearing.

The Day Ahead

Investors should continue tracking US lawmaker chatter and regulatory activity.

Updates from the SEC v Ripple case would provide direction, with rulings on the latest Court filings, the Hinman Documents, and the Summary Judgment Reply Briefs as the focal points.

With Binance and Coinbase (COIN) in the spotlight, related news will move the dial.

XRP Price Action

At the time of writing, XRP was up 0.04% to $0.53251. A choppy start to the day saw XRP fall to an early low of $0.52870 before rising to a high of $0.53684.

Technical Indicators

XRP needs to move through the $0.5371 pivot to target the First Major Resistance Level (R1) at $0.5525 and the Thursday high of $0.5573. A return to $0.55 would signal another bullish session. However, SEC v Ripple chatter would need to support a breakout.

In the case of another extended rally, XRP would likely test the Second Major Resistance Level (R2) at $0.5727 and resistance at the current week’s high of $0.58479. The Third Major Resistance Level (R3) sits at $0.6083.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.5169 in play. However, barring an extended broad-based crypto sell-off, XRP should avoid sub-$0.51 and the Second Major Support Level (S2) at $0.5015. The Third Major Support Level (S3) sits at $0.4659.

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

At the time of writing, XRP sat above the 50-day EMA, currently at $0.48646. The 50-day EMA pulled further away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA. The EMAs delivered bullish signals.

A hold above the Major Support Levels and the 50-day EMA ($0.48646) would support a breakout from R1 ($0.5525) to target R2 ($0.5727). However, a fall through S1 ($0.5169) would bring S2 ($0.5015) and the 50-day ($0.48646) into play. A fall through the 50-day EMA would send a bearish signal.