XRP Price Action Points to a Return to $0.40 Despite SEC v Ripple Stall

Key Insights:

• On Wednesday, XRP rallied by 3.81% to reverse a 2.98% slide from Tuesday.
• There were no updates from the SEC v Ripple case, leaving XRP in the hands of US CPI numbers, which delivered a return to $0.38.
• The technical indicators are bullish, with XRP sitting above the 50-day EMA, ahead of US wholesale inflation that could deliver and XRP return to $0.40.

On Wednesday, XRP rallied by 3.81%. Reversing a 2.98% slide from Tuesday, XRP ended the day at $0.3815

A bearish start to the day saw XRP fall to an early low of $.3584. Finding support at the First Major Support Level (S1) at $0.3589, XRP surged to a day high of $0.3815.

Supported by softer US inflation figures, XRP broke through the First Major Resistance Level (R1) at $0.3780 to end the day at $0.3815.

On Wednesday, the US annual rate of inflation softened from 9.1% to 8.5%. Economists forecast a softening to 8.7%. The softer headline number led to a shift in sentiment towards Fed monetary policy. The markets had priced in a 75-basis point rate hike before Wednesday’s numbers, which led to expectations of a 50-basis point move.

Updates from the SEC v Ripple case had a muted price impact as investors await court rulings on the Hinman speech-related documents.

The SEC v Ripple Case Leaves XRP at sub-$0.40

XRP last visited $0.40 on July 30, with a July high of $0.4098, and on June 10. Hopes of a favorable outcome to the SEC v Ripple case have provided short-lived XRP price breakouts. However, uncertainty surrounding the SEC v Ripple case has left XRP on the back foot.

The lack of progress towards a final decision on the William Hinman speech-related documents remains a headwind.

In July, the Court denied the SEC claim that William Hinman’s speech-related documents fall under the attorney-client privilege. The decision led to another SEC attempt to change the Court’s ruling. Before the latest Court decision, the SEC had filed at least six motions attempting to shield the Hinman documents under the attorney-client privilege.

The SEC has not delivered the documents, despite the Court rulings. Investors await a final decision and one that the SEC is unable to contest. Any Court ruling on the Hinman speech-related documents is likely to have a material bearing on the case and XRP price action.

XRP Price Action

At the time of writing, XRP was up 0.73% to $0.3843.

A bullish start to the day saw XRP rise from an early low of $0.3813 to a high of $0.3858.

Technical Indicators

An XRP hold above the $0.3738 pivot would support a run at the First Major Resistance Level (R1) at $0.3892.

XRP would need support from the broader market to breakout from the morning high of $0.3858. Today, the US wholesale inflation numbers and the SEC v Ripple case are the key drivers.

In the case of an extended crypto rebound, XRP could test the Second Major Resistance Level (R2) at $0.3969 and resistance at $0.40.

The Third Major Resistance Level sits at $0.4077.

A fall through the pivot would bring the First Major Support Level at $0.3661 into play. Barring a spike in US wholesale inflation, XRP should avoid sub-$0.36 and the Second Major Support Level (S2) at $0.3507.

The Third Major Support Level (S3) sits at $0.3276

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

At the time of writing, XRP sat above the 50-day EMA, currently at $0.3726.

The 50-day EMA pulled away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish XRP price signals.

A continued 50-day EMA widening from the 100-day EMA would support a move through R1 ($0.3892) to bring R2 ($0.3969) and $0.40 into play.

However, a fall through the 50-day EMA ($0.3726) would support a fall through the 100-day EMA, currently at $0.3690, to bring S1 ($0.3661) into view.