XRP Bulls Face Uncertainty Ahead of Gensler Testimony on the Hill

Key Insights:

• On Monday, XRP fell by 1.94% to end the day at $0.51107.
• Regulatory activity weighed on XRP as investors await SEC v Ripple Court rulings.
• The technical indicators were mixed, signaling a choppy session ahead.

On Monday, XRP fell by 1.94%. Reversing a 0.21% loss from Sunday, XRP ended the day at $0.51107. Despite the bearish session, XRP avoided sub-$0.50 for the fifth consecutive session.

Bearish throughout the morning, XRP slid from an opening price of 0.52104 to a mid-afternoon low of $0.50698. XRP fell through the First Major Support Level (S1) at $0.5166 and the Second Major Support Level (S2) at $0.5121. Finding late support, XRP briefly broke back through S2 before ending the day at $0.51107.

Investors Back into Wait and See Mode Leaves XRP Under Pressure

It was a quiet Monday session, with no updates from the ongoing  SEC v Ripple case to influence. The lack of stats left XRP in the hands of the crypto news wires and the broader crypto market.

News of the SEC filing charges against Bittrex for illegally operating an unregistered securities platform weighed on investor sentiment.

Regarding the charges, SEC Chair Gary Gensler said,

“Today’s action, yet again, makes plain that the crypto markets suffer from a lack of regulatory compliance, not a lack of regulatory clarity.”

The latest move follows the SEC turn to the DeFi space, which gives the SEC a more substantial base to target unregistered platforms to target.

However, investor sentiment could change this afternoon. SEC Chair Gary Gensler will give testimony at a digital asset sub-committee hearing on Capitol Hill. Intense scrutiny of the SEC approach to regulation and sweeping statements to capture the digital asset space would provide XRP price support.

While there were no SEC v Ripple case updates, Stuart Alderoty provided some background to excluding XRP from the Ripple Liquidity Hub, saying,

“Can’t join the Spaces today but wanted to clarify some Qs on our newest product Liquidity Hub. 1/ LH is an enterprise (institutional) product, not retail. In the US, there is little liquidity for XRP. We’re keen to support XRP in LJ when we can provide a good customer experience.”

Alderoty added,

“Also, as previously stated in our blog post – XRP does not have regulatory clarity in the US, which is, of course, important to enterprise customers.”

The Day Ahead

Investors should monitor the crypto news wires and Twitter for updates from the ongoing SEC v Ripple case.

However, a lack of SEC v Ripple case-related news will leave SEC and CFTC activity in the spotlight. Binance and Coinbase (COIN)-related commentary will also move the dial.

The next main event is the digital asset sub-committee hearing on Capitol Hill. Gary Gensler will be in the spotlight this afternoon as US lawmakers question the regulation by enforcement mantra. FTX and the classification of cryptos could be other hot topics.

XRP Price Action

At the time of writing, XRP was up 0.19% to $0.51205. A mixed start to the day saw XRP rise to an early high of $0.51303 before falling to a low of $0.51114.

Technical Indicators

XRP needs to move through the $0.5130 pivot to target the First Major Resistance Level (R1) at $0.5191 and the Monday high of $0.52104. A return to $0.5150 would signal a bullish session. However, 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 $0.5271 and resistance at $0.53. The Third Major Resistance Level (R3) sits at $0.5412.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.5050 in play. However, barring an extended sell-off, XRP should avoid sub-$0.50 and the Second Major Support Level (S2) at $0.4990. The Third Major Support Level (S3) sits at $0.4849.

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

At the time of writing, XRP sat above the 100-day EMA, currently at $0.50621. The 50-day EMA narrowed to the 100-day EMA, while the 100-day EMA widened from the 200-day EMA. The EMAs delivered bearish signals.

A move through the 50-day EMA ($0.51413) would support a breakout from R1 ($0.5191) to target R2 ($0.5271) and $0.53. However, failure to move through the 50-day EMA ($0.51413) would leave S1 ($0.5050) and the 100-day EMA ($0.50621) in view. A move through the 50-day EMA would send a bullish signal.