XRP Bulls Face Risk of Sub-$0.3650 on SEC Regulatory Activity

Key Insights:

• On Tuesday, XRP joined the broader market in the red, falling by 0.53% to end the day at $0.37669.
• While Fed Fear and regulatory activity weighed, optimism toward the SEC v Ripple case limited the losses.
• However, the technical indicators remained bearish, signaling a return to sub-$0.36.

On Tuesday, XRP fell by 0.53%. Reversing a 0.20% gain from Monday, XRP ended February down by 7.20% to $0.37669. XRP ended the day at sub-$0.38 for the fifth consecutive session.

A bearish start to the day saw XRP fall to an early morning low of $0.37197. XRP fell through the First Major Support Level (S1) at $0.3731 before rising to a session high of $0.38227. Coming up against the First Major Resistance Level (R1) at $0.3822, XRP slid back to sub-$0.38 and into the red.

SEC v Ripple Silence Leaves XRP at Sub-$0.38 Despite Optimism

There were no SEC v Ripple case updates to guide investors on Tuesday. The lack of updates left XRP in the hands of the crypto news wires.

Following the updates from the G20 on plans to introduce a global crypto regulatory framework, the SEC was back in the news. News of the SEC issuing Robinhood (HOOD) a subpoena sounded the alarm bells. There were also rumors of Visa (V) and Mastercard (MA) reconsidering their crypto plans.

While the bearish news left the crypto market with heavy losses on Tuesday, optimism toward the SEC v Ripple case cushioned the downside.

Hopes are for a favorable outcome, with investors expecting the Hinman Documents to force the SEC into a settlement.

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.

The contentious issue with the speech relates to Hinman’s connection with Simpson Thacher. Simpson Thacher is part of a group that promotes Enterprise Ethereum. After leaving the SEC, Hinman returned to Simpson Thacher.

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.”

The Day Ahead

Updates from the SEC v Ripple case remain key. However, a lack of updates would leave XRP in the hands of the broader crypto market. While investors should continue monitoring Binance and FTX-related news, we expect SEC activity and US lawmaker chatter to remain the focal point.

In the afternoon session, US economic indicators and Fed chatter will also provide the NASDAQ Composite Index and the broader crypto market direction. US ISM Manufacturing PMI numbers will draw interest.

XRP Price Action

At the time of writing, XRP was down 0.39% to $0.37521. A bearish start to the day saw XRP fall from an early high of $0.37615 to a low of $0.37521.

Technical Indicators

XRP needs to move through the $0.3770 pivot to target the First Major Resistance Level (R1) at $0.3820 and the Tuesday high of $0.38227. 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 $0.3873 and resistance at $0.39. The Third Major Resistance Level (R3) sits at $0.3976.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.3717 in play. However, barring an extended broad-based crypto sell-off, XRP should avoid sub-$0.3650. The Second Major Support Level (S2) at $0.3667 should limit the downside. The Third Major Support Level (S3) sits at $0.3564.

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 $0.38176. The 50-day EMA fell back from the 200-day EMA, with the 100-day EMA pulling back from the 200-day EMA. The signals were bearish.

An XRP breakout from the 50-day EMA ($0.38176) and R1 ($0.3820) would give the bulls a run at the 100-day EMA ($0.38550) and R2 ($0.3873). An XRP move through the 50-day EMA ($0.38176) would send a bullish signal. However, failure to move through the 50-day EMA ($0.38176) would leave the Major Support Levels in play.