XRP Bulls Eye a Return to $0.42 on Growing SEC v Ripple Optimism

Key Insights:

• On Wednesday, XRP bucked a bearish crypto market trend for a third session, rising by 2.33% to end the day at $0.38899.
• Investors brushed aside news of Silvergate Bank planning to liquidate, with updates from the SEC v Ripple case delivering XRP price support.
• The technical indicators turned bullish, signaling a return to $0.45.

On Wednesday, XRP rose by 2.33%. Following a 2.68% gain on Tuesday, XRP ended the day at $0.38899. Significantly, XRP revisited the 0.40 handle for the first time since February 21.

A mixed start to the day saw XRP fall to a mid-morning low of $0.37248. Steering clear of the First Major Support Level (S1) at $0.3700, XRP rallied to an early afternoon high of $0.40117. XRP broke through the First Major Resistance Level (R1) at $0.3873 and briefly through the Second Major Resistance Level (R2) at $0.3944 before easing back to end the day at $0.38899.

SEC v Ripple Case Rulings Deliver Further XRP Price Support

Investors continued to respond to Monday’s Court rulings from the SEC v Ripple case. Presiding Judge Torres granted and denied motions from both sides. However, the Courts denied more motions from the SEC to exclude expert witness testimony, placing the Defendants on a better footing.

The latest Court rulings returned the market focus to the SEC v Ripple case at a difficult time for the crypto market. The outcome could prove pivotal for the broader digital asset space. On Wednesday, news of Silvergate Bank planning to shut its doors added to the market angst.

Ripple CEO Brad Garlinghouse had this to say,

“The headwinds keep growing – with the SEC declaring war on crypto, Chair Gensler continues to harp that firms simply need to come in and register, but the truth is there’s no infrastructure in place for a registered token to trade nor any clarity as to what these tokens are.”

The Ripple CEO added,

“If you want to regulate, then regulate. Put in the hard work to build a framework and set guidance, as so many other G20 countries are already doing. The 27 EU member countries can agree on a set of rules with MiCA… What’s stopping the US?!”

The Day Ahead

Updates and commentary from the SEC v Ripple case will likely have more influence than other crypto events. Following the Court rulings on Monday, investors will be eyeing Court decisions relating to the Hinman Documents that could have a material bearing on the case, XRP, and the broader crypto market.

Investors await a ruling on an SEC Motion to Redact certain content after failing to shield the entirety of the documents under the attorney-client privilege. A ruling against the SEC could raise speculation of a likely settlement.

Ripple CEO Brad Garlinghouse shared his views on the speech-related documents, saying,

“When those come to light, I think you will see more kind of like, how is it possible for the SEC to decide to bring a case against Ripple given what they were saying within their own walls.”

By way of background, William Hinman remains a central figure in the SEC v Ripple case. Former SEC Director of the Division of Corporation Finance William Hinman said that Bitcoin (BTC) and Ethereum (ETH) are not securities.

Beyond the SEC v Ripple case, investors should continue monitoring Binance and FTX-related news. Regulatory activity and lawmaker chatter will likely remain the focal point.

This afternoon, US jobless claims and Fed chatter will also influence.

XRP Price Action

At the time of writing, XRP was up 0.34% to $0.39031. A mixed start to the day saw XRP fall to an early low of $0.38580 before rising to a high of $0.39031.

Technical Indicators

XRP needs to avoid the $0.3875 pivot to target the First Major Resistance Level (R1) at $0.4026. 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 extended rally, XRP would likely test the Second Major Resistance Level (R2) at $0.4162 and resistance at $0.42. The Third Major Resistance Level (R3) sits at $0.4449.

A fall through the pivot would bring the First Major Support Level (S1) at $0.3739 into play. However, barring an extended broad-based crypto sell-off, XRP should avoid sub-$0.37 and the Second Major Support Level (S2) at $0.3589. The Third Major Support Level (S3) sits at $0.3302.

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

At the time of writing, XRP sat above the 200-day EMA, currently at $0.38318. 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 bullish.

A hold above the 200-day EMA ($0.38318) would support a breakout from R1 ($0.4026) to give the bulls a run at R2 ($0.4162) and $0.42. However, a fall through the EMAs would bring S1 ($0.3739) into play. An XRP fall through the 50-day EMA ($0.37766) would send a bearish signal.