XRP Eyes a Return to $0.3950 to target $0.40 on SEC v Ripple Comments
- On Wednesday, XRP fell by 2.26%. Reversing a 0.67% gain from Tuesday, XRP ended the day at $0.38317.
- Uncertainty drove risk aversion on Wednesday, with the ongoing SEC v Ripple case testing investor resilience.
- The technical indicators are bearish, with XRP below the 50-day EMA, signaling a possible return to $0.35.
On Wednesday, XRP fell by 2.26%. Reversing a 0.67% gain from Tuesday, XRP ended the day at $0.38317. Notably, XRP fell to sub-$0.38 for the first time since November 28.
A choppy morning saw XRP rise to an early high of $0.39233. Coming up short of the First Major Resistance Level (R1) at $0.3961, XRP slid to a mid-morning low of $0.37387. XRP fell through the First Major Support Level (S1) at $0.3845 and the Second Major Support Level (S2) at $0.3769.
However, finding late-morning support, XRP broke back through S2 to revisit $0.38359 before easing back.
Risk Aversion and SEC v Ripple Jitters Send XRP into the Red
It was a quiet Wednesday session, with no updates from the ongoing SEC v Ripple case to influence. The lack of updates left investors to second-guess the possible scenarios, which include a settlement with the SEC.
While the SEC and the defendants could announce a settlement at any time, the next Court date of December 22 is approaching. Legal experts don’t see a Court ruling on the Summary Judgment Reply briefs for a few months, taking the case into 2023.
Therefore, we could see investors get more anxious should the crypto news wires remain silent on the prospects of a settlement.
On Wednesday, Ripple defense attorney Stuart Alderoty broke down the defense against the SEC, saying,
“As it clearly states in our briefs, Ripple does not depend on a conclusion that XRP was purchased for use – though such a conclusion, as shown by amici briefs and the non-speculative evidence, would defeat the SEC’s claims.”
Alderoty elaborated by stating,
“Out actual arguments: a/ There is no contract for an investment between Ripple and any XRP holder; b/ the SEC cannot satisfy a single prong of the Howey test, and Ripple concedes not a single prong; c/ the SEC’s reliance on garden-variety ICO cases have no application here.”
The comments provided support but not enough to reverse losses from the session.
Today, we expect XRP price volatility to linger, with investor sensitivity to comments relating to the case likely to influence. Away from the SEC v Ripple case, market risk sentiment will remain a key driver, with investors likely taking their cues from the NASDAQ Composite Index.
XRP Price Action
At the time of writing, XRP was up 1.19% to $0.38772. A bullish start to the day saw XRP rise to an early high of $0.39070 before easing back.
XRP needs to avoid the $0.3831 pivot to retarget the Wednesday high of $0.39233 and the First Major Resistance Level (R1) at $0.3924. A return to $0.39 would signal a bullish session.
In the case of an extended rally, the bulls would take a run at the Second Major Resistance Level (R2) at $0.4016. The Third Major Resistance Level (R3) sits at $0.4200.
A fall through the pivot would bring the First Major Support Level (S1) at $0.3739 into play. However, barring an extended sell-off, XRP should avoid sub-$0.3650 and the Second Major Support Level (S2) at $0.3647. The Third Major Support Level (S3) sits at $0.3462.
Chatter relating to the redacted Summary Judgment Reply briefs and updates from the SEC v Ripple case will influence.
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 $0.38876. The 50-day EMA fell back from the 100-day EMA, with the 100-day EMA easing back from the 200-day EMA. The signals were bearish.
A breakout from the 50-day EMA ($0.38876) and the 100-day EMA ($0.39044) would support a move through R1 ($0.3924) to target R2 ($0.4016). The 200-day EMA sits at ($0.39912). However, failure to move through the 50-day ($0.38876) would leave S1 ($0.3739) and sub-$0.37 in play.