XRP Bears to Target Sub-$0.3850 as Technical Indicators Turn Bearish

Key Insights:

• On Monday, XRP fell by 1.61% to end the day at $0.39216.
• Updates from the SEC v Ripple case failed to provide price support. The bearish sentiment from the broader crypto market weighed.
• The technical indicators are bearish, with XRP sitting below the 200-day EMA, signaling a near-term fall to sub-$0.38.

On Monday, XRP fell by 1.61%. Following a 3.01% slide on Sunday, XRP ended the day at $0.39216. XRP wrapped up the day at sub-$0.40 for the second time in seven sessions.

After a choppy morning session, XRP rose to an early evening high of $0.40357. Coming up short of the First Major Resistance Level (R1) at $0.4088, XRP slid to a final-hour low of $0.39132. XRP fell through the First Major Support Level (S1) at $0.3914 before a partial recovery to end the day at $0.39216.

SEC v Ripple Updates Overshadowed by Binance and Fed Fear

On Monday, defense attorney James Filan shared the latest from the ongoing SEC v Ripple case, saying,

“John Deaton will be filing a Motion to File an Amicus Brief in Zakinov v Ripple in California. There, the plaintiffs claim that Ripple sold XRP as an unregistered security. They are asking the court to certify a class of ALL XRP holders who purchased and now hold XRP or who sold XRP at a loss.”

Filan pointed out that the proposed class would include 75,890 XRP holders who disagree with the small number of plaintiffs in Zakinov. Notably, some XRP holders reside in countries that have already determined that XRP is not a security.

A Court ruling in favor of the plaintiffs could create uncertainty over the SEC v Ripple case, which would be price negative.

Away from the SEC v Ripple case, news of Binance temporarily suspending US dollar withdrawals for non-Binance US customers weighed on investor sentiment. January’s US Jobs Report from Friday continued to weigh on riskier assets on Monday, with the latest report raising the prospects of a hawkish March Fed interest rate hike.

Today, investors should continue to monitor the crypto news wires for updates from the SEC v Ripple case, FTX, Genesis, and Silvergate Bank. There are no US economic indicators to influence, while hawkish FOMC member chatter would be bearish.

XRP Price Action

At the time of writing, XRP was down 0.05% to $0.39197. A mixed start to the day saw XRP rise to an early high of $0.39319 before hitting reverse.

Technical Indicators

XRP needs to move through the $0.3957 pivot to target the First Major Resistance Level (R1) at $0.4000 and the Monday high of $0.40357. A return to $0.40 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 SEC v Ripple-fueled extended rally, XRP would likely test the Second Major Resistance Level (R2) at $0.4079 and resistance at $0.41. The Third Major Resistance Level (R3) sits at $0.4202.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.3878 in play. However, barring a broad-based crypto sell-off, XRP should avoid sub-$0.38. The Second Major Support Level (S2) at $0.3834 should limit the downside. The Third Major Support Level (S3) sits at $0.3712.

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

At the time of writing, XRP sat below the 200-day EMA, currently at $0.39416. The 50-day EMA closed in on the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA. The signals were bearish.

A bearish cross of the 50-day EMA through the 100-day EMA would support a slide through S1 ($0.3878) to bring S2 ($0.3834) into play. However, a move through the 200-day EMA ($0.39416) would support a breakout from R1 ($0.4000) to target the 100-day ($0.40279) and 50-day ($0.40500) EMAs. A move through the 50-day EMA would send a bullish signal.