XRP Holds Hope of a Return to $1.00 on a Ripple Win Against the SEC

Key Insights:

• On Monday, XRP joined the broader crypto market in the red for a Third consecutive session, falling by 1.45% to end the day at $0.46478.
• Recessionary jitters and Fed Fear continued to weigh on investor sentiment.
• The technical indicators turned bearish, signaling a return to $0.43.

On Monday, XRP fell by 1.45%. Following a 1.39% loss on Sunday, XRP ended the day at $0.46478. Significantly, XRP revisited sub-$0.46 for the first time in four sessions.

A bullish start to the day saw XRP rise to a first-hour high of $0.47256. However, falling short of the First Major Resistance Level (R1) at $0.4791, XRP slid to an early evening low of $0.45496.

XRP fell through the First Major Support Level (S1) at $0.4667 and briefly through the Second Major Support Level (S2) at $0.4618 before wrapping up the day at $0.46478.

SEC v Ripple Silence Leaves XRP in the Hands of the Broader Market

It was a quiet Monday session, with no SEC v Ripple case updates to influence. The lack of updates left XRP in the hands of the broader crypto market.

News of JPMorgan Chase (JPM) acquiring First Republic Bank (FRC) assets and US economic indicators weighed on buyer appetite.

In April, the ISM Manufacturing PMI rose from 46.3 to 47.1. The key takeaways from the ISM survey included sharp increases in the employment and prices sub-components. The ISM Manufacturing Employment Index jumped from 46.9 to 50.2, with the Prices Index up from 49.2 to 53.2.

The latest US stats supported a more hawkish Fed monetary policy outlook, weighing on XRP and the broader market.

According to the CME FedWatch Tool, the probability of a 25-basis point May interest rate hike rose from 83.9% to 93.2% in 24 hours. Significantly, the chances of a 25-basis point June interest rate hike increased from 23.9% to 27.7%.

SEC Settlement Views from Attorney John Deaton

While there were no SEC v Ripple Court rulings to consider, Amicus Curiae attorney John Deaton addressed settlement-related questions. Deaton had this to say about a Ripple settlement,

“Quite a few people ask why would Ripple settle if they won. First, I didn’t think say Ripple would agree to the same terms of a settlement they would’ve agreed to 2 years ago. It all depends on the ruling itself. Does Coinbase and Kraken immediately resist or wait for an appeal?”

Deaton added,

“If the SEC told Ripple it would issue a statement that all future sales of XRP are no securities (not saying it would) and not appeal if Ripple agrees to pay $50M, I believe the certainty and immediate return of liquidity to the US makes Brad Garlinghouse sign a check in seconds.”

Deaton concluded that it could be a different story if the Judge rules for XRP, resulting in liquidity returning to the US without businesses worrying about upsetting the SEC if they use XRP.

Considering the importance of certainty and the need to avoid a lengthy appeal, the Ripple defense team also has the Hinman documents to present for the SEC to agree to a favorable settlement.

The Day Ahead

Investors should continue to monitor SEC v Ripple case-related chatter, with Binance and Coinbase (COIN)-related news and SEC activity needing consideration.

This afternoon, US economic indicators will influence. US JOLTs job openings and factory orders will be in focus.

With the Fed in action tomorrow, we expect the JOLTs job openings to draw more interest, with quit rates needing consideration. A slide in the quit rate would signal deteriorating labor market conditions and ease pressure on the Fed to deliver a hawkish interest rate hike.

Away from the economic calendar, US corporate earnings will also influence market risk sentiment. Big names on the US earnings calendar include Pfizer Inc. (PFE), Starbucks Corp. (SBUX), and Ford Motor Co (F).

XRP Price Action

At the time of writing, XRP was down 0.42% to $0.46281. A mixed start to the day saw XRP rise to an early high of $0.46491 before falling to a low of $0.46238.

Technical Indicators

Resistance & Support Levels

XRP needs to move through the $0.4641 pivot to target the First Major Resistance Level (R1) at $0.4732. A breakout from the Monday high of $0.47256 would signal a bullish session. However, SEC v Ripple chatter and the crypto market news must support a breakout session.

In the case of an extended rally, XRP would likely test the Second Major Resistance Level (R2) at $0.4817 and resistance at $0.49. The Third Major Resistance Level (R3) sits at $0.4993.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.4556 in play. However, barring a crypto event-fueled sell-off, XRP should avoid sub-$0.4450. The Second Major Support Level (S2) at $0.4465 should limit the downside. The Third Major Support Level (S3) sits at $0.4289.

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

At the time of writing, XRP sat below the 50-day EMA, currently at $0.47108. The 50-day EMA pulled back from the 200-day EMA, with the 100-day EMA converging on the 200-day EMA. The EMAs delivered bearish signals.

A move through the 50-day ($0.47108) would support a breakout from R1 ($0.4732) to target the 200-day ($0.47639) and 100-day ($0.47731) EMAs and R2 ($0.4817). However, failure to move through the 50-day EMA ($0.47108) would leave S1 ($0.4556) and sub-$0.45 in view. A move through the 50-day EMA would send a bullish signal.