XRP Eyes Sub-$0.4550 on SEC v Ripple Silence and Debt Ceiling Woes

Key Insights:

• On Tuesday, XRP gained 0.83% to end the day at $0.46560.
• News of the Hong Kong Securities and Futures Commission opening its doors to retail crypto trading delivered support.
• The technical indicators remain bullish, signaling a return to $0.50.

On Tuesday, XRP rose by 0.83%. Following a 1.05% gain on Monday, XRP ended the day at $0.46560. Significantly, XRP saw green for the ninth time in ten sessions.

A bullish start to the day saw XRP rise to a mid-morning high of $0.46700. However, falling short of the First Major Resistance Level (R1) at $0.4695, XRP fell to an early afternoon low of $0.45857. Steering clear of the First Major Support Level (S1) at $0.4520, XRP bounced back to end the day at $0.46560.

Hong Kong Securities and Futures Commission News Delivered Support

It was a quiet Tuesday session, with no updates from the ongoing SEC v Ripple case to influence. The lack of updates left XRP in the hands of the crypto news wires, US economic indicators, and US debt ceiling talks.

On Tuesday, the Hong Kong Securities and Futures Commission (HKSFC) took a big step toward becoming a crypto hub.

The HKSFC announced that retail investors may trade crypto, effective June 1, 2023. The news delivered a morning breakout.

US economic indicators delivered late support, with better-than-expected service sector PMI numbers easing immediate fears of a US recession. While the manufacturing PMI fell from 50.2 to 48.5, the services PMI increased from 53.4 to 54.5. Economists forecast both PMIs to decline to 50.0.

However, the US debt ceiling impasse capped the upside. The increasing threat of a US default tested buyer appetite.

The Day Ahead

It is a quiet Wednesday session for XRP and the broader crypto market. There are no US economic indicators to influence this afternoon. However, the FOMC meeting minutes will draw interest late in the US session. Hawkish minutes would test buyer appetite.

While the minutes will provide direction, US Treasury Secretary Janet Yellen and debt ceiling talks will remain focal points. A failure to progress toward a deal would be a bearish price scenario.

However, investors should also continue to track SEC v Ripple updates and Binance and Coinbase (COIN)-related news.

XRP Price Action

At the time of writing, XRP was down 0.82% to $0.46177. A bearish start to the day saw XRP fall from an opening price of $0.46465 to a low of $0.46153.

XRP Technical Indicators

Resistance & Support Levels

XRP needs to move through the $0.4637 pivot to target the First Major Resistance Level (R1) at $0.4689. A move through the Tuesday high of $0.46700 would signal a bullish 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 Second Major Resistance Level (R2) at $0.4722 and resistance at $0.4750. The Third Major Resistance Level (R3) sits at $0.4806.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.4604 in play. However, barring a crypto event or risk-off-fueled sell-off, XRP should avoid sub-$0.4550. The Second Major Support Level (S2) at $0.4553 should limit the downside. The Third Major Support Level (S3) sits at $0.4469.

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

At the time of writing, XRP sat above the 50-day EMA, currently at $0.45597. The 50-day EMA crossed through the 200-day EMA, with the 100-day EMA narrowing to the 200-day EMA. The EMAs delivered more bullish signals.

A hold above the 50-day EMA ($0.45597) would support a breakout from R1 ($0.4689) to target R2 ($0.4722) and $0.4750. However, a fall through S1 ($0.4604) and the 50-day ($0.45597) and 200-day ($0.45553) EMAs would bring S2 ($0.4553) and the 100-day EMA ($0.45243) into view. A fall through the 50-day EMA would send a bearish signal.