XRP Bulls to Target $0.4250 on Easing Contagion Risk and Fed Sentiment

Key Insights:

• On Saturday, XRP fell by 1.11% to end the day at $0.40797.
• A lack of updates from the SEC v Ripple case left XRP in the hands of the broader crypto market and regulatory chatter.
• However, the technical indicators remain bullish, with XRP sitting above the 50-day EMA, signaling a return to $0.45.

On Saturday, XRP fell by 1.11%. Reversing a 0.75% gain from Friday, XRP ended the day at $0.40797. Despite the bearish session, XRP avoided sub-$0.40 levels for the fourth time in six sessions.

A bullish start to the day saw XRP rise to an early high of $0.41643. Coming up short of the First Major Resistance Level (R1) at $0.4178, XRP slid to a late low of $0.40585. However, steering clear of the First Major Support Level (S1) at $0.4037, XRP found late support to end the day at $0.40797.

Increased Crypto Scrutiny Weighed on Investor Sentiment

There were no updates from the ongoing SEC v Ripple case to distract investors on Saturday. The lack of updates left XRP in the hands of the broader crypto market and the crypto news wires.

US lawmakers and regulatory scrutiny continued testing investor sentiment on Saturday. Despite softer inflation numbers and easing fear of a hawkish Fed, a White House Administration roadmap and SEC Chair Gary Gensler chatter from Friday left XRP and the broader crypto market in the red.

The roadmap and Gensler’s comments raise the threat of more aggressive steps to regulate by enforcement, a negative for the broader crypto market.

However, easing FTX and Genesis contagion risk and the expectations of a less aggressive Fed interest rate trajectory to bring inflation to target remain tailwinds.

Today, investors should monitor updates from the SEC v Ripple case. However, a lack of updates would leave the broader crypto market to provide direction. FTX and Genesis updates, along with regulatory chatter, will draw interest.

XRP Price Action

At the time of writing, XRP was up 1.33% to $0.41341. A mixed start to the day saw XRP fall to an early low of $0.40692 before rising to a high of $0.41378.

Technical Indicators

XRP needs to avoid a fall through the $0.4101 pivot to target the First Major Resistance Level (R1) at $0.4143 and the Saturday high of $0.41643. A return to $0.4150 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 $0.4207 and resistance at $0.4250. The Third Major Resistance Level (R3) sits at $0.4312.

A fall through the pivot would bring the First Major Support Level (S1) at $0.4037 into play. However, barring a crypto event-fueled sell-off, XRP should avoid sub-$0.40 and the Second Major Support Level (S2) at $0.3995. The Third Major Support Level (S3) sits at $0.3889.

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

At the time of writing, XRP sat above the 50-day EMA, currently at $0.40742. 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 hold above the 50-day EMA ($0.40742) would support a breakout from R1 ($0.4143) to target R2 ($0.4207) and $0.4250. However, a fall through the 50-day EMA ($0.40742) would bring S1 ($0.4037) into view. A fall through the 50-day EMA would send a bearish signal.