XRP Bears to Target Sub-$0.3450 on SEC v Ripple Anxiety

Key Insights:

• On Saturday, XRP fell by 0.65% to end the day at $0.35212.
• A quiet crypto session saw trading volumes pull back, with no updates from the SEC v Ripple case to draw interest.
• The technical indicators remain bearish, with XRP sitting below the 50-day EMA, supporting a near-term decline to $0.30.

On Saturday, XRP fell by 0.65%. Partially reversing a 1.47% gain from Friday, XRP ended the day at $0.35212. XRP held onto the $0.35 handle for the second time in seven sessions.

A bearish morning saw XRP fall from an early high of $0.35443 to a late morning low of $0.35109. However, steering clear of the First Major Support Level (S1) at $0.3493, XRP rose to a late high of $0.3527 before easing back.

There were no updates from the ongoing SEC v Ripple case from Friday to provide direction. The lack of updates left investors to consider the possible outcomes of the case and the chances of a Ripple victory.

SEC v Ripple Case Continues to Test Investor Sentiment

An SEC victory would be bad for XRP and the broader crypto market. This week, Gary Gensler vowed to target crypto platforms that fail to follow securities laws. The comments come in the wake of the collapse of FTX and news of the SEC’s relationship with Sam Bankman-Fried and FTX, leading to SEC General Counsel Dan Berkovitz announcing his departure.

For the XRP community, the William Hinman speech-related documents remain the focal point. The SEC-FTX relationship highlights the regulator’s selective relationships within the crypto community.

This week, the SEC sought to shield the Hinman speech-related documents again. Before the Thursday filing, the SEC had made at least six attempts to protect the William Hinman speech-related documents under the attorney-client privilege. The SEC’s failed attempts culminated in the Court ordering the SEC to hand the documents over to the Defendants.

A Court ruling against the SEC would allow the use of the documents in Court and make the speech-related documents a matter of public record. Considering the SEC’s ongoing efforts to shield the documents, such a Court ruling could force the SEC into a settlement.

For Gary Gensler and the SEC, a Ripple settlement would bring greater lawmaker scrutiny and could pass the responsibility of regulating the digital asset space to the CFTC, a preferred eventuality for the crypto community.

As background, former SEC Director of the Division of Corporation Finance William Hinman said that Bitcoin (BTC) and Ethereum (ETH) are not securities. The contentious issue with the speech related to Hinman’s connection with Simpson Thacher, which is part of a group that promotes Enterprise Ethereum. After leaving the SEC, Hinman returned to Simpson Thacher.

Uncertainty over the Court ruling on the Summary Judgment Reply briefs and Thursday’s filings will likely test investor sentiment over the holidays.

XRP Price Action

At the time of writing, XRP was down 0.75% to $0.34948. A bearish start to the day saw XRP fall from an early high of $0.35172 to a low of $0.34849.

XRP fell through the First Major Support Level (S1) at $0.3507 and briefly through the Second Major Support Level (S2) at $0.3492.

Technical Indicators

XRP needs to move through S1 and the $0.3525 pivot to target the First Major Resistance Level (R1) at $0.3540 and the Saturday high of $0.35443. A return to $0.3540 would signal a bullish session.

In the case of an extended rally, the Second Major Resistance Level (R2) at $0.3559 would likely come into play. The Third Major Resistance Level (R3) sits at $0.3592.

Failure to move through S1 and the pivot would leave the Second Major Support Level (S2) at $0.3492 in play. However, barring an extended sell-off, XRP should avoid the Third Major Support Level (S3) at $0.3459.

Today, there are unlikely to be any material updates from the SEC v Ripple case to influence. A lack of news will likely cap any upside.

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 $0.35288. The 50-day EMA eased back from the 100-day EMA, with the 100-day EMA falling back from the 200-day EMA. The signals were mixed.

A breakout from the 50-day EMA ($0.35288) would support a move through R1 ($0.3540) to target R2 ($0.3559). However, failure to move through the 50-day EMA ($0.35288) would leave XRP at risk of a fall to sub-$0.34.