XRP Bulls to Target $0.42 on Powell Driven Shift in Sentiment

Key Insights:

• On Tuesday, XRP rose by 2.97% to end the day at $0.4038.
• Updates from the SEC v Ripple case took a backseat, with Fed Chair Powell driving demand for riskier assets.
• The technical indicators turned bullish, with XRP sitting above the 100-day EMA, signaling a return to sub-$0.42.

On Tuesday, XRP rose by 2.97%. Reversing a 1.61% fall from Monday, XRP ended the day at $0.4038. XRP wrapped up the day at $0.40 for the first time in three sessions.

A bearish start to the day saw XRP fall to an early morning low of $0.39042. Steering clear of the First Major Support Level (S1) at $0.3878, XRP rallied to a final-hour high of $0.40482. XRP broke through the First Major Resistance Level (R1) at $0.4000 and briefly through the Second Major Resistance Level (R2) at $0.4079 before easing back to end the day at $0.4038.

SEC v Ripple Updates Take a Backseat to Fed Chair Powell

On Tuesday, Fed Chair Powell delivered riskier assets with direction. Following Friday’s US Jobs Report and ISM Non-Manufacturing PMI, uncertainty over the effect of hotter-than-expected numbers on the Fed’s interest rate trajectory had weighed on riskier assets.

BTC was on a five-day losing streak going into the Tuesday session, with XRP having seen red in four of five sessions.

However, Fed Chair Powell delivered a less hawkish-than-expected speech, driving demand for riskier assets and an XRP return to the $0.40 handle. The Fed Chair avoided spooking the markets by calling for more aggressive policy moves while discussing rate cuts.

The NASDAQ Index and the S&P 500 responded to the Powell speech, ending the day with gains of 1.90% and 1.29%, respectively.

There were no updates from the ongoing SEC v Ripple case to influence. However, Amicus Curiae attorney James Deaton was back in the spotlight this week.

On Monday, defense attorney James Filan shared the latest news, 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, 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 XRP price negative.

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. FOMC members Williams, Waller, and Barr will be speaking today.

With FOMC member chatter in focus, the NASDAQ Index will likely influence the afternoon session.

XRP Price Action

At the time of writing, XRP was down 0.34% to $0.40242. A mixed start to the day saw XRP rise to an early high of $0.40577 before falling to a low of $0.40242.

Technical Indicators

XRP needs to avoid a fall through the $0.3997 pivot to target the First Major Resistance Level (R1) at $0.4089. A move through the Tuesday high of $0.40482 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 another extended rally, XRP would likely test the Second Major Resistance Level (R2) at $0.4141 and resistance at $0.4150. The Third Major Resistance Level (R3) sits at $0.4285.

A fall through the pivot would bring the First Major Support Level (S1) at $0.3945 into play. However, barring a broad-based crypto sell-off, XRP should avoid sub-$0.39 and the Second Major Support Level (S2) at $0.3853. The Third Major Support Level (S3) sits at $0.3709.

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

At the time of writing, XRP sat above the 100-day EMA, currently at $0.40235. The 50-day EMA moved away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA. The signals were bullish.

A move through the 50-day EMA would support a breakout from R1 ($0.4089) to target R2 ($0.4141) and $0.4150. However, a bearish cross of the 50-day EMA through the 100-day EMA would give the bears a run at S1 ($0.3945) and the 200-day EMA ($0.39443). A move through the 50-day EMA would send a bullish signal.