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XRP Eyes $0.48 on Brad Garlinghouse Optimism Toward the SEC Case

By:
Bob Mason
Published: May 26, 2023, 03:38 GMT+00:00

It is a busy day for XRP. US economic indicators and debt ceiling talks will move the dial. However, sentiment toward the SEC v Ripple case will be the key.

XRP Tech Analysis - FX Empire

In this article:

Key Insights:

  • On Thursday, XRP gained 0.13% to end the session at $0.45372.
  • Fed Fear and the risk of a US default left XRP under pressure, while Brad Garlinghouse delivered late support.
  • The technical indicators turned bullish, signaling a return to $0.48.

On Thursday, XRP rose by 0.13%. Partially reversing a 2.68% decline from Wednesday, XRP ended the day at $0.45372. Significantly, XRP revisited sub-$0.45 for the second time in seven sessions.

A bearish start to the day saw XRP fall to an early morning low of $0.44335. XRP fell through the First Major Support Level (S1) at $0.4443 before striking a final-hour high of $0.45430. However, falling short of the First Major Resistance Level (R1) at $0.4633, XRP eased back to end the day at $0.45372.

FED Fear Offset Bullish Brad Garlinghouse Views and Debt Ceiling Talks

It was a quiet Thursday, with no Court rulings from the ongoing SEC v Ripple case to provide direction.

However, Ripple CEO Brad Garlinghouse hit the news wires, announcing a likely Court ruling in weeks rather than months. The Ripple CEO referenced the recent Judge Torres ruling on the Willian Hinman speech-related documents set for disclosure on June 13.

While the optimism was bullish, rising bets on a Fed interest rate hike in June and the ongoing risk of a US default limited the upside.

US economic indicators drove bets of a 25-basis point Fed interest rate hike in June.

Initial jobless claims increased from 225k to 229k versus a forecasted 250k. Upward revisions to the Q1 GDP numbers were also bullish. The US economy expanded by 1.3% in Q1 versus a prelim 1.1% and 2.6% growth in Q4.

According to the CME FedWatch Tool, the probability of a 25-basis point Fed interest rate hike in June jumped from 36.4% to 52.2% on Thursday.

While reports of progress toward a debt ceiling deal were also bullish, investors remained cautious, with investors mindful of the risk of another collapse in talks.

The Day Ahead

It is a busier Friday session for XRP and the broader crypto market. US core durable goods orders, Core PCE Price Index, personal spending/income, and Michigan consumer sentiment numbers will be in focus.

The Core PCE Price Index numbers will likely have the most impact. Sticky inflation would fuel bets of a 25-basis point Fed interest rate hike in June and ease expectations of an H2 interest rate cut.

Economists forecast the Core PCE Price Index to increase by 4.6% year-over-year in April versus 4.6% in March.

However, US debt ceiling-related news will remain a focal point, with failure to reach a deal likely to weigh on XRP and the broader crypto market.

Investors should also track SEC v Ripple updates and Binance and Coinbase (COIN)-related news. While US debt ceiling news will influence, Court rulings from the SEC v Ripple case would have more impact.

XRP Price Action

At the time of writing, XRP was up 1.39% to $0.46001. A mixed start to the day saw XRP fall to an early low of $0.45276 before rising to a high of $0.46735. XRP broke through the First Major Resistance Level (R1) at $0.4576 and briefly through the Second Major Resistance Level (R2) at $0.4614.

XRP makes an early move.
XRPUSD 260523 Daily Chart

XRP Technical Indicators

Resistance & Support Levels

R1 – $ 0.4576 S1 – $ 0.4466
R2 – $ 0.4614 S2 – $ 0.4395
R3 – $ 0.4724 S3 – $ 0.4286

XRP needs to avoid a fall through R1 and the $0.4505 pivot to retarget the Second Major Resistance Level (R2) at $0.4614 and the morning high of $0.46735. A return to $0.4650 would signal an extended breakout session. However, SEC v Ripple updates and US debt ceiling-related news must support a breakout session.

In the case of an extended rally, XRP would likely test the Third Major Resistance Level (R3) at $0.4724 and resistance at $0.48.

However, a fall through R1 and the pivot would bring the First Major Support Level (S1) at $0.4466 into play. However, barring a crypto event or risk-off-fueled sell-off, XRP should avoid sub-$0.44 and the Second Major Support Level (S2) at $0.4395. The Third Major Support Level (S3) sits at $0.4286.

XRP resistance levels in play.
XRPUSD 260523 Hourly Chart

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

At the time of writing, XRP sat above the 200-day EMA, currently at $0.45523. The 50-day EMA converged on the 200-day EMA, with the 100-day EMA narrowing to the 200-day EMA. The EMAs delivered bullish signals.

A hold above R1 ($0.4576) and the 200-day EMA ($0.45523) would support a breakout from R2 ($0.4614) to target R3 ($0.4724) and $0.48. However, a fall through R1 ($0.4576) and the EMAs would bring S1 ($0.4466) into view. A fall through the 50-day EMA ($0.45480) would send a bearish signal.

EMAs turned bullish.
XRPUSD 260523 4 Hourly Chart

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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