XRP Bears to Target Sub-$0.37 on US Lawmaker and SEC Chatter

Key Insights:

• On Wednesday, XRP joined the broader crypto market in the red, falling by 1.62% to end the day at $0.37729.
• SEC v Ripple silence left US lawmakers and SEC Gary Gensler to leave the crypto market in the red.
• The technical indicators remained bearish, signaling a return to sub-$0.36.

On Thursday, XRP fell by 1.62%. Partially reversing a 1.81% gain from Wednesday, XRP ended the day at $0.37729. Significantly, XRP ended the day at sub-$0.38 for the sixth time in seven sessions.

A bullish start to the day saw XRP rise to an early morning high of $0.38458. Falling short of the First Major Resistance Level (R1) at $0.3875, XRP slid to a late afternoon low of $0.37382. However, steering clear of the First Major Support Level (S1) at $0.3763, XRP revisited the $0.38 handle before falling back into the deep red.

SEC Chair Gensler and US Lawmakers Leave XRP on the Back Foot

It was another quiet session for XRP, with no SEC v Ripple case updates to guide investors on Thursday. The lack of updates left XRP in the hands of the crypto news wires.

Increased regulatory and US lawmaker scrutiny weighed on investor sentiment.

On Thursday, SEC Chair Gary Gensler took the opportunity to target the crypto market during an SEC Investor Advisory Committee Meeting. The SEC Chair focused on custody issues and the comingling of customer assets and losses for investors. US lawmakers added to the somber mood. A letter from US Senators from both sides of the aisle to Binance drew plenty of interest.

Addressed to Binance CEO CZ, US Senators called on Binance to share ‘information regarding growing concerns over the finances, risk management, and regulatory compliance of Binance, Binance.US, and other related entities.’

The letter went on to say,

“Meanwhile, what little information about Binance’s finances is available to the public suggests that the exchange is a hotbed of illegal financial activity that has facilitated over $10 billion in payments to criminals and sanctions evaders.”

The latest moves against the crypto market space delivered more regulatory uncertainty. While investors may be able to stomach regulation by enforcement, lawmaker scrutiny would remove hopes of Capitol Hill passing the powers to regulate to the CFTC.

The Day Ahead

Updates from the SEC v Ripple case remain key. Hinman Document-related rulings would have a material impact on XRP price action. However, a lack of updates would leave XRP in the hands of the crypto news wires and the US economic calendar.

The all-important ISM Non-Manufacturing PMI and Fed commentary will influence the afternoon session. A pickup in service sector activity, input and output prices, and hawkish Fed hatter would be bearish for XRP. FOMC Members Logan, Bostic, and Bowman speak today. The markets will want to know how many members support a 50-basis point move.

However, investors should continue monitoring Binance and FTX-related news, with SEC activity and US lawmaker chatter likely to remain the focal point.

Fed Fear and regulatory risk jitters remain headwinds that will continue to peg XRP back from a sustainable breakout.

XRP Price Action

At the time of writing, XRP was up 0.03% to $0.37740. A mixed start to the day saw XRP fall to an early low of $0.37666 before rising to a high of $0.37796.

Technical Indicators

XRP needs to move through the $0.3786 pivot to target the First Major Resistance Level (R1) at $0.3833 and the Thursday high of $0.38458. A return to $0.38 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 an extended rally, XRP would likely test the Second Major Resistance Level (R2) at $0.3893 and resistance at $0.39. The Third Major Resistance Level (R3) sits at $0.4001.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.3725 in play. However, barring an extended broad-based crypto sell-off, XRP should avoid sub-$0.3650. The Second Major Support Level (S2) at $0.3678 should limit the downside. The Third Major Support Level (S3) sits at $0.3570.

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 $0.38082. The 50-day EMA eased back from the 200-day EMA, with the 100-day EMA falling back from the 200-day EMA. The signals were bearish.

An XRP move through the 50-day EMA ($0.38082) would support a breakout from R1 ($0.3833) and the 100-day EMA ($0.38419) to bring the 200-day EMA ($0.38683) and R2 ($0.3893) into play. An XRP move through the 50-day EMA ($0.38082) would send a bullish signal. However, failure to move through the 50-day EMA ($0.38082) would leave the Major Support Levels in play.