XRP Bears to Target Sub-$0.3650 on SEC Activity and Fed Fear

Key Insights:

• On Tuesday, XRP rallied by 3.13% to end the day at $0.38228.
• US lawmaker scrutiny over Gary Gensler and the SEC delivered a relief rally.
• However, the technical indicators remain bearish, with XRP sitting below the 200-day EMA, signaling a return to sub-$0.35.

On Tuesday, XRP rallied by 3.13%. Reversing a 1.14% fall from Monday, XRP ended the day at $0.38228. XRP visited sub-$0.37 for the second time since January 13.

A bearish start to the day saw XRP fall to an early morning low of $0.36491. Steering clear of the First Major Support Level (S1) at $0.3624, XRP rallied to a final-hour high of $0.38373. XRP broke through the First Major Resistance Level (R1) at $0.3787 to end the day at $0.38228.

US Lawmakers Raise Question Marks Over Gensler Tactics

It was a quiet Tuesday session, with no updates from the SEC v Ripple case to influence investor sentiment. US lawmakers provided relief following the SEC moves against Kraken and staking services and Paxos and Binance USD (BUSD).

Amidst heightened scrutiny in the wake of the FTX bankruptcy, Gary Gensler and the SEC came under scrutiny on Tuesday.

On Tuesday, the Senate Banking Committee held a hearing, Crypto Crash: Why Financial System Safeguards are Needed for Digital Assets. Questions over Gary Gensler and the SEC’s regulation by enforcement and lack of SEC guidance to crypto firms highlighted Gensler and the SEC’s failings.

There were also calls for Gensler to testify sooner rather than later, with lawmakers noting Gensler’s appearances on morning talk shows.

Investors took the focus on Gensler and the SEC’s regulation by enforcement as positive, supporting a bullish session. Gensler’s tactics come at a pivotal time for the SEC, with the SEC v Ripple case now in the hands of presiding Judge Torres.

The crypto markets will hope for a Ripple victory that would force US lawmakers to rein in the SEC Chair. More importantly, the disclosure of the William Hinman speech-related documents could hand over the reins to the CFTC.

The Day Ahead

It could be another choppy session, with US retail sales likely to put the Fed and the US economy in the spotlight. However, SEC activity and lawmaker chatter will likely have more influence on investor appetite.

Investors should monitor the crypto news wires for SEC v Ripple case updates.

XRP Price Action

At the time of writing, XRP was down 1.04% to $0.37829. A bearish start to the day saw XRP fall from an opening price of $0.38211 to a low of $0.37829.

Technical Indicators

XRP needs to avoid a fall through the $0.3770 pivot to target the First Major Resistance Level (R1) at $0.3890. A return to $0.3850 would signal a bullish session. However, the broader crypto market and 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 $0.3958 and resistance at $0.40. The Third Major Resistance Level (R3) sits at $0.4146.

A fall through the pivot would bring the First Major Support Level (S1) at $0.3702 into play. However, barring another extended broad-based crypto sell-off, XRP should avoid sub-$0.3650 levels and the Second Major Support Level (S2) at $0.3582. The Third Major Support Level (S3) sits at $0.3393.

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 $0.38383. The 50-day EMA pulled back from the 200-day EMA, with the 100-day EMA converging on the 200-day EMA. The signals were bearish.

A bearish cross of the 100-day EMA through the 200-day EMA would support a slide through S1 ($0.3702) to bring $0.3650 into view. However, a move through the 50-day EMA ($0.38383) would signal a breakout from R1 ($0.3890) to give the bulls a run at the 200-day ($0.39009) and 100-day ($0.39015) EMAs. A move through the 50-day EMA would send a bullish signal.