XRP Price Action and a Return to $0.40 Hinged on FTX Bailout Progress

Key Insights:

• On Thursday, XRP rallied by 18.59%, reversing an 18.14% slump from Wednesday.
• Hopes of an FTX bailout and the US CPI report for October delivered a breakout session.
• The technical indicators are bearish, with XRP sitting below the t0-day EMA, signaling a return to sub-$0.30.

On Thursday, XRP rallied by 18.59%. Reversing an 18.14% loss from Wednesday, XRP ended the day at $0.39448. Notably, XRP revisited $0.40 before easing back.

A mixed start to the day saw XRP fall to an early low of $0.33019. Steering clear of the First Major Support Level (S1) at $0.2983, XRP rallied to a late high of $0.40155. XRP broke through the First Major Resistance Level (R1) at $0.3887 to end the day at $0.39448.

The SEC v Ripple case continued to take a backseat on Thursday, with the market focus remaining on FTX. Following the Binance withdrawal on Wednesday, news of Tron’s Justin Sun working on a solution provided much-needed support.

In the afternoon session, the US CPI report for October provided XRP and the broader market with a boost. Softer inflation figures fueled Fed pivot bets for December. XRP rallied by 6.5% in response to the CPI report.

Amicus Brief Requests Continued to Roll in Ahead of Today’s Deadline

On Thursday, The New Sports Economy Institute (NSEI) and InvestReady filed requests to file Amicus Briefs in support of the Defendants.

InvestReady took a different approach to other Amicus Brief filing requests. According to the InvestReady filing, (referencing ETH and XRP)

“What we need to do is find a way forward that acknowledges the fact that these instruments were securities, allows for the continuation of the innovations and utility that both provide, and protect the investors, and they are investors, that are holding these tokens as they would be the ones to suffer if any draconian measures were taken.”

InvestReady proposed,

“A combination of a settlement in this case, a subtle rule change for accredited investors, and a path to commodity/decentralization for tokens that are no longer securities via a decentralization audit.”

The filing went on to say,

“In this case, I would argue that ETH has successfully converted into a commodity (and would pass a theoretical decentralization audit), whereas the supply of XRP is still more than 50% controlled by Ripple and therefore too centralized under the proposed rules.”

InvestorReady added,

“Part of my proposed settlement would be for XRP to release more than 50% of the existing supply of tokens and submit to a decentralization audit to certify sufficient decentralization to be considered a commodity.”

With the list of Amicus Briefs sitting firmly in Ripple’s camp, the InvestReady filing gives the Court another viewpoint. However, it remains to be seen whether SEC Chair Gary Gensler would be amenable to tokens shifting from the oversight of the SEC to the Commodity Futures Trading Commission (CFTC).

XRP Price Action

At the time of writing, XRP was up 0.60% to $0.39685. A mixed start to the day saw XRP fall to an early low of $0.38832 before rising to a high of $0.39777.

Technical Indicators

XRP needs to avoid the $0.3754 pivot to target the First Major Resistance Level (R1) at $0.4206. A move through the Thursday high of $0.40155 would signal a bullish session, though FTX bailout news updates will have to be crypto-friendly.

In the case of an extended rally, the bulls would take a run at the Second Major Resistance Level (R2) at $0.4468. The Third Major Resistance Level (R3) sits at $0.5181.

A fall through the pivot would bring the First Major Support Level (S1) at $0.3493 into play. However, barring another extended sell-off, XRP should avoid sub-$0.33 and the Second Major Support Level (S2) at $0.3040. The Third Major Support Level (S3) sits at $0.2327.

Throughout the session, FTX news updates will remain the key driver, with any negative news linked to the FTX collapse likely to send XRP into a tailspin.

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 $0.42709. The 50-day EMA eased back from the 100-day EMA, with the 100-day EMA falling back from the 200-day EMA. The signals were bearish.

A move through R1 ($0.4206) would bring the 50-day EMA ($0.42709) into play. However, failure to move through R1 and the 50-day EMA ($0.42709) would leave S1 ($0.3493) in view.