XRP Bulls to Target $0.45 on Optimistic SEC v Ripple Sentiment

Key Insights:

• On Monday, XRP led the crypto top ten, rallying by 5.97% to end the day at $0.42467.
• SEC v Ripple chatter and the NASDAQ Index delivered a first visit to $0.43 since November 8.
• The technical indicators are bullish, with XRP sitting above the 50-day EMA, signaling a return to $0.45.

On Monday, XRP rallied by 5.97%. Reversing a 0.59% decline from Sunday, XRP ended the day at $0.42467. XRP visited $0.43 for the first time since November 8.

A bullish start to the day saw XRP rally from an early low of $0.40020 to a late high of $0.43296. XRP broke through the First Major Resistance Level (R1) at $0.4096 and the Second Major Resistance Level (R2) at $0.4184 to end the day at $0.42467.

The Optimism of a Ripple Victory Delivers $0.43

It was a quiet Monday session, with no updates from the ongoing SEC v Ripple case for investors to consider. The SEC v Ripple case now sits in the hands of Judge Torres, with market participants and Ripple CEO Brand Garlinghouse expecting a ruling by the summer.

Amicus Curiae attorney John Deaton and Brad Garlinghouse have recently talked optimistically about the case, supporting the current XRP move toward $0.50.

For the defendants and the XRP community, a ruling against the SEC’s motion to redact content within the William Hinman speech-related documents could seal the SEC’s fate. The SEC’s eagerness to shield the speech-related documents from the public and Garlinghouse’s comments relating to the content of the documents suggest that the SEC could settle before going to a jury trial.

Talking from Davos, Ripple CEO Brad Garlinghouse had this to say about the Hinman speech-related documents,

“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.”

As background, 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 related to Hinman’s connection with Simpson Thacher, which is part of a group that promotes Enterprise Ethereum. After leaving the SEC, Hinman returned to Simpson Thacher.

With the SEC mandate to protect investors, embarrassing content could push lawmakers to hand the baton to the CFTC to regulate the digital asset space. A Ripple victory could be a perfect storm for the broader crypto market. A victory could also end the current regime of regulation by enforcement.

The Day Ahead

Today, we expect SEC v Ripple chatter to continue drawing interest. However, the broader crypto market would need to continue its move northwards to support another XRP breakout.

US economic indicators and corporate earnings will likely provide direction in the afternoon, with the US private sector and Microsoft (MSFT) earnings in the spotlight.

XRP Price Action

At the time of writing, XRP was down 0.49% to $0.42259. XRP fell to an early low of $0.42104 before rising to a high of $0.42417.

Technical Indicators

XRP needs to avoid a fall through the $0.4193 pivot to target the First Major Resistance Level (R1) at $0.4384. A move through the Monday high of $0.43296 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 $0.4520. The Third Major Resistance Level (R3) sits at $0.4848.

A fall through the pivot would bring the First Major Support Level (S1) at $0.4056 into play. However, barring an extended sell-off, XRP should avoid sub-$0.40 and the Second Major Support Level (S2) at $0.3865. The Third Major Support Level (S3) sits at $0.3538.

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 $0.39955. The 50-day EMA pulled further away from the 200-day EMA, with the 100-day EMA widening from the 200-day EMA. The signals were bullish.

A hold above S1 ($0.4056) and the 50-day EMA ($0.39955) would support a breakout from R1 ($0.4384) to target R2 ($0.4520). However, a fall through S1 ($0.4056) and the 50-day EMA ($0.39955) would bring the 100-day EMA ($0.38679) and S2 ($0.3865) into view. A pullback from the 50-day EMA would be a bearish signal.