XRP Bears Eye Sub-$0.38 as SEC v Ripple Jitters Test Buyer Appetite

Key Insights:

• On Sunday, XRP rose by 0.60%, ending a three-day losing streak.
• Broader crypto market support delivered the upside as investors continued digesting the latest SEC v Ripple Court filings.
• The technical indicators are bearish, with XRP below the 50-day EMA, signaling a possible return to $0.35.

On Sunday, XRP rose by 0.60%. Partially reversing a 2.09% loss from Saturday, XRP ended the week down 1.68% to $0.38990. XRP ended the day at sub-$0.39 for the second time in six sessions. XRP also fell short of $0.40 for the third consecutive session.

After a choppy morning, XRP fell to an early afternoon low of $0.38644. Steering clear of the First Major Support Level (S1) at $0.3831, XRP rose to a late high of $0.39326. However, coming up short of the First Major Resistance Level (R1) at $0.3946, XRP eased back to end the week at sub-$0.39 levels.

SEC v Ripple Case to Remain Front and Centre as Case Nears Conclusion

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

However, XRP saw modest gains on Sunday, with investor anxiety toward the outcome of the SEC v Ripple case creeping in as the case nears its conclusion.

Going into the weekend, investors had the opportunity to consider the Summary Judgment Reply briefs. After the filings, a level of uncertainty returned, muting investor optimism toward a favorable outcome to the case.

On Sunday, Ripple Defense Counsel Stuart Alderoty shared two SEC quotes, saying,

“Follow the bouncing regulator.”

“Howey provides a clearly expressed test for determining what constitutes an investment contract. SEC 4/22/21.”

“Hinman’s speech provided thirteen expressly non-exhaustive factors that market participants could consider. 12/2/22.”

Alderoty was demonstrating the shift in the SEC’s position during the SEC v Ripple case in its attempts to snare Ripple Labs and the defendants.

With the Reply briefs sitting with the Court, investors await a decisive Court ruling that could come ahead of the December 22 Court filings.

Last Wednesday, attorney James Filan said,

“I believe that she (Judge Torres) will decide everything together, and it won’t be until she rules on the motions for summary judgment, and it will be in one big written ruling.”

One area of focus remains the William Hinman speech-related documents that Judge Torres may also consider.

Filan noted that Judge Torres would make public any documents used in making a ruling. Since the start of the case, the SEC has attempted to shield the Hinman speech-related documents under the attorney-client privilege, suggesting that the SEC could settle should there be a risk of the speech-related documents reaching the public domain.

XRP Price Action

At the time of writing, XRP was down 0.05% to $0.38971. A mixed start to the day saw XRP fall to an early low of $0.38939 before rising to a high of $0.39292.

Technical Indicators

XRP needs to move through the $0.3899 pivot to target the First Major Resistance Level (R1) at $0.3933. A move through the Sunday high of $0.39326 would signal a bullish session.

In the case of an extended rally, the bulls would take a run at the Second Major Resistance Level (R2) at $0.3967 and $0.40. The Third Major Resistance Level (R3) sits at $0.4035.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.3865 in play. However, barring an extended sell-off, XRP should avoid sub-$0.38. The Second Major Support Level (S2) at $0.3830 and support at $0.3800 should limit the downside. The Third Major Support Level (S3) sits at $0.3762.

Chatter relating to Friday’s redacted Summary Judgment Reply briefs will draw interest.

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 $0.39220. The 50-day EMA pulled back from the 100-day EMA, with the 100-day EMA easing back from the 200-day EMA. The signals were bearish.

A breakout from the 50-day EMA ($0.39220) and the 100-day EMA ($0.39246) would support a move through R1 ($0.3933) to target R2 ($0.3967) and $0.40. The 200-day EMA sits at ($0.40172). However, failure to move through the 50-day ($0.39220) would leave S1 ($0.3865) in play.