XRP Bears Eye Sub-$0.34 on SEC v Ripple Jitters and Lawmaker Chatter

Key Insights:

• On Saturday, XRP rose by 0.82% to end a three-day losing streak.
• A lack of SEC v Ripple case updates left XRP in the hands of the broader crypto market.
• However, the technical indicators remain bearish, with XRP sitting below the 50-day EMA, supporting a near-term decline to $0.30.

On Saturday, XRP rose by 0.82%. Partially reversing a 7.07% slide from Friday, XRP ended the day at $0.35445. While XRP revisited sub-$0.35 for the second time since November 21, XRP ended a three-day losing streak.

A bullish start to the day saw XRP rise to an early morning high of $0.35703. Coming up short of the First Major Resistance Level (R1) at $0.3728, XRP fell to a late afternoon low of $0.34741. However, steering clear of the First Major Support Level (S1) at $0.3374, XRP bounced back to end the day at $0.35445.

Liquidity Crunch Fears Abated to Deliver Modest XRP Support

There were no material updates from the ongoing SEC v Ripple case on Saturday, leaving XRP in the hands of the broader crypto market.

Market angst over the ongoing FUD campaign against Binance eased, delivering much-needed support.

However, crypto headwinds pegged the crypto market back from a more meaningful recovery. Regulatory risk has resurfaced since the collapse of FTX, creating uncertainty about the regulatory landscape and how it would impact XRP and the crypto market.

With the ongoing SEC v Ripple case, we also expect uncertainty about whether lawmakers and regulators can affect the outcome. The collapse of FTX has driven lawmakers and regulators to take a tougher view of the digital asset space, which could also influence Judge Torres.

As investors await a Court ruling on the Summary Judgment Reply briefs, the next Court date is December 22. Parties must file omnibus motions to seal all materials relating to the summary judgment motions and proposed redactions to such materials.

For the SEC, losing the case could hand the crypto regulator baton to the CFTC. Lawmakers are calling for an investigation into the SEC’s failure to prevent the collapse of FTX. Gary Gensler has been quieter than usual in the wake of the FTX collapse. A loss in the Ripple case would be another embarrassment.

XRP Price Action

At the time of writing, XRP was down 0.57% to $0.35244. A range-bound start to the day saw XRP rise to an early high of $0.35496 before falling to a low of $0.35244.

Technical Indicators

XRP needs to move through the $0.3530 pivot to target the First Major Resistance Level (R1) at $0.3585. A move through the Saturday high of $0.35703 would signal a bullish session.

In the case of an extended rally, the Second Major Resistance Level (R2) at $0.3626 and $0.3650 would likely come into play. The Third Major Resistance Level (R3) sits at $0.3722.

Failure to move through the pivot would give the bears a run at the First Major Support Level (S1) at $0.3489. However, barring another extended sell-off, XRP should avoid sub-$0.34. The Second Major Support Level (S2) at $0.3433 should limit the downside. The Third Major Support Level (S3) sits at $0.3337.

Barring updates from the SEC v Ripple case and a crypto exchange event, XRP will likely sit in the hands of the crypto exchange liquidity updates.

The EMAs and the 4-hourly candlestick chart (below) sent a bearish signal.

At the time of writing, XRP sat below the 50-day EMA, currently at $0.37426. The 50-day EMA slid back from the 100-day EMA, with the 100-day EMA falling back from the 200-day EMA. The signals were bearish.

A move through R1 ($0.3585) would support a breakout from R2 ($0.3626) to bring R3 ($0.3722) and the 50-day EMA into view. However, failure to return to $0.36 would leave XRP at risk of a fall to sub-$0.34.