XRP Eyes $0.41 on Easing Regulatory Risk and SEC v Ripple Optimism

Key Insights:

• On Thursday, XRP joined the broader crypto market in the red, sliding by 4.20% to end the day at $0.38434.
• US economic indicators weighed on investor sentiment, with no SEC v Ripple updates to distract investors.
• The technical indicators turned bearish, signaling a return to sub-$0.37.

On Thursday, XRP slid by 4.20%. Partially reversing a 4.95% rally from Wednesday, XRP ended the day at $0.38434. Despite the bearish session, XRP avoided sub-$0.38 levels for the first time since February 11.

A bullish start to the day saw XRP rise to an early morning high of $0.40447. Coming up short of the First Major Resistance Level (R1) at $0.4101, XRP fell to sub-$0.40 levels. After a bullish start to the afternoon session, XRP slid to a final-hour low of $0.38434. The First Major Support Level (S1) at $0.3845 delivered late support.

SEC v Ripple Silence Left XRP in the Hands of the Fed

There were no updates from the ongoing SEC v Ripple case to distract investors on Thursday. The lack of updates left XRP in the hands of US economic indicators and the broader crypto market.

Sticky inflation remains a Fed and market bugbear. Wholesale inflationary pressures eased but not sufficiently enough to allow the Fed to take its foot off the gas. Hawkish Fed chatter added to the bearish mood, which sent the NASDAQ Composite Index and the broader crypto market into the red.

Despite the Thursday pullback, investors remain optimistic of a favorable outcome to the SEC v Ripple case. A Ripple victory would likely have material ramifications for the SEC. Gensler and the team are hoping for US lawmakers to give the SEC the baton to regulate the digital asset space. A Ripple victory would change the narrative.

The Day Ahead

Investors should continue monitoring the crypto news wires for updates from the SEC v Ripple case. A lack of updates would leave XRP in the hands of the broader crypto market.

While Fed Fear remains a crypto headwind, easing regulatory risk and US lawmaker support are tailwinds. However, SEC regulation by enforcement leaves XRP exposed to downside risks until a regulatory framework is in place.

We expect SEC and US lawmaker chatter to remain the focal point today. Silvergate Bank, FTX, and Genesis updates would also need consideration. A lack of crypto news stories could leave the NASDAQ Composite Index to direct the afternoon session.

XRP Price Action

At the time of writing, XRP was up 0.84% to $0.38758. A mixed start to the day saw XRP fall to an early low of $0.38142 before rising to a high of $0.38812.

Technical Indicators

XRP needs to move through the $0.3911 pivot to target the First Major Resistance Level (R1) at $0.3978 and the Thursday high of $0.40447. A return to $0.40 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 $0.4112 and resistance at $0.4150. The Third Major Resistance Level (R3) sits at $0.4313.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.3776 in play. However, barring an extended broad-based crypto sell-off, XRP should avoid sub-$0.37 levels. The Second Major Support Level (S2) at $0.3709 should limit the downside. The Third Major Support Level (S3) sits at $0.3508.

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

At the time of writing, XRP sat below the 50-day EMA, currently at $0.38767. The 50-day EMA fell back from the 200-day EMA, with the 100-day EMA converging on the 200-day EMA. The signals were bearish.

A bearish cross of the 100-day EMA through the 200-day would support a fall through S1 ($0.3776) to bring S2 ($0.3709) into play. However, a move through the 50-day EMA ($0.38767) would support a breakout from the 200-day and 100-day EMAs to bring the Major Resistance Levels into play. A move through the 50-day EMA would send a bullish signal.