XRP Bulls Face the Risk of Sub-$0.43 on US Debt Ceiling Jitters

Bob Mason
Published: May 25, 2023, 02:04 UTC

XRP was back in the red this morning, with the US debt ceiling crisis weighing, which will remain a focal point barring an SEC v Ripple Court ruling.

XRP - Technical Analysis - FX Empire.

In this article:

Key Insights:

  • On Wednesday, XRP joined the broader market in the red, falling by 2.68% to end the day at $0.45314.
  • SEC v Ripple silence left debt ceiling-related news and the Fed to influence.
  • The technical indicators turned bearish, signaling a return to sub-$0.44.

On Wednesday, XRP fell by 2.68%. Reversing a 0.83% gain from Tuesday, XRP ended the day at $0.45314. Significantly, XRP revisited sub-$0.45 for the first time in six sessions.

Bearish throughout the day, XRP fell from an opening price of $0.46465 to a late afternoon low of $0.44560. XRP fell through the Major Support Levels before a partial recovery through the Third Major Support Level (S3) at $0.4469 to end the day at $0.45314.

US Debt Ceiling Talks and SEC v Ripple Silence Weighed

It was a quiet Wednesday session. There were no Court rulings from the ongoing SEC v Ripple case to distract investors from the US debt ceiling crisis. News of Kylie Chiseul Kim withdrawing as counsel for Ripple Lab Inc. did not influence investor sentiment.

The lack of Court rulings left XRP in the hands of the crypto news wires, the FOMC meeting minutes, and US debt ceiling talks.

The global financial markets responded to the lack of progress toward a US debt ceiling deal. With the deadline looming, the threat of a US default fueled a flight to safety.

Late in the session, the FOMC meeting minutes weighed on investor sentiment.

While the FOMC meeting minutes gave no surprises to distract investors from the debt ceiling crisis, FOMC members did not write off a June interest rate hike. Concerns over inflation raised bets on a June move. However, FOMC members voiced worries about the debt ceiling.

According to the CME FedWatch Tool, the probability of a 25-basis point Fed interest rate hike in June stood at 36.4%, up from 28.1% on Tuesday.

Ripple news failed to cushion the downside. On Wednesday, news hit the wires of Ripple acquiring shares in Bitstamp, a European crypto exchange. The share purchase took place in Q1, according to Galaxy Digital’s Q1 report. Ripple continues to explore non-US jurisdictions as part of its expansion drive.

The Day Ahead

It is a busier Thursday session for XRP and the broader crypto market. US GDP and initial jobless claims will draw interest this afternoon. An unexpected fall in jobless claims and upward revisions to GDP numbers would fuel bets on a June interest rate hike.

However, US debt ceiling-related chatter will remain the key driver. A lack of progress towards a debt ceiling deal would overshadow better-than-expected US economic indicators.

While debt ceiling-related news will remain a focal point, investors should track SEC v Ripple updates and Binance and Coinbase (COIN)-related news.

XRP Price Action

At the time of writing, XRP was down 0.74% to $0.44980. A mixed start to the day saw XRP rise to an early high of $0.45336 before falling to a low of $0.44918.

XRP sees red.
XRPUSD 250523 Daily Chart

Technical Indicators

Resistance & Support Levels

R1 – $ 0.4633 S1 – $ 0.4443
R2 – $ 0.4735 S2 – $ 0.4354
R3 – $ 0.4926 S3 – $ 0.4164

XRP needs to move through the $0.4545 pivot to target the First Major Resistance Level (R1) at $0.4633 and the Wednesday high of $0.46465. A return to $0.46 would signal a bullish session. However, SEC v Ripple updates and US debt ceiling-related news must support a breakout session.

In the case of an extended rally, XRP would likely test the Second Major Resistance Level (R2) at $0.4735 and resistance at $0.48. The Third Major Resistance Level (R3) sits at $0.4926.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.4443 in play. However, barring a crypto event or risk-off-fueled sell-off, XRP should avoid sub-$0.43. The Second Major Support Level (S2) at $0.4354 should limit the downside. The Third Major Support Level (S3) sits at $0.4164.

XRP support levels in play below the pivot.
XRPUSD 250523 Hourly Chart

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

At the time of writing, XRP sat below the 100-day EMA, currently at $0.45245. The 50-day EMA crossed through the 200-day EMA, with the 100-day EMA easing back from the 200-day EMA. The EMAs delivered bearish signals.

A move through the EMAs would support a breakout from R1 ($0.4633) to target R2 ($0.4735) and $0.48. However, failure to move through the EMAs would leave S1 ($0.4443) and sub-$0.44 Major Support Levels in view. A move through the 50-day EMA ($0.45524) would send a bullish signal.

EMAs are bearish.
XRPUSD 250523 4 Hourly Chart

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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