XRP Price Action Turns Bearish on SEC v Ripple Outcome Scenarios
- On Monday, XRP slipped by 0.12%, marking the fourth loss in five sessions.
- SEC v Ripple uncertainty and bearish sentiment from across the broader market, stemming from a NASDAQ pullback, weighed.
- The technical indicators are bearish, with XRP below the 50-day EMA, signaling a possible return to $0.35.
On Tuesday, XRP rose by 0.67%. Reversing a 0.12% fall from Monday, XRP ended the day at $0.39204. XRP ended the day at $0.39 for the first time in four sessions while visiting sub-$0.39 for a fifth consecutive session.
A choppy morning saw XRP slide to a late-morning low of $0.38093. XRP fell through the First Major Support Level (S1) at $0.3819. However, finding afternoon support, XRP rallied to a late high of $0.39251. Coming up short of the First Major Resistance Level (R1) at $0.3959, XRP eased back to end the day at $0.39204.
SEC v Ripple Case Jitters Leave XRP on the Defensive
It was a quiet Tuesday session, with no updates from the ongoing SEC v Ripple case to influence. The lack of news left XRP on the defensive, with uncertainty toward the outcome of the SEC v Ripple continuing to test buyer appetite.
With no updates, investors considered the possible outcomes of the case, which may not be apparent until early 2023.
On Monday, John Deaton said,
“Of course, it’s possible that Judge Torres could split the proverbial baby and rule that Ripple, at some point, ‘offered’ an unregistered security, but the token itself is not, nor are secondary market sales independent of Ripple. Either way, the Ripple / XRP case is ground zero.”
Following the collapse of FTX, Gary Gensler and the SEC will be under more pressure to win the case. The implications of the outcome will also be far-reaching, with an SEC win allowing the SEC to continue regulating by enforcement.
On paper, the chances of the SEC settling the case look slim. However, the Hinman speech-related documents remain a factor in the case and could still prove pivotal.
XRP Price Action
At the time of writing, XRP was down 1.69% to $0.38541. A mixed start to the day saw XRP rise to an early high of $0.39233 before falling to a low of $0.38519.
XRP needs to move through the $0.3885 pivot to target the First Major Resistance Level (R1) at $0.3961. A move through the Tuesday high of $0.39251 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 $0.4001. The Third Major Resistance Level (R3) sits at $0.4117.
Failure to move through the pivot would leave the First Major Support Level (S1) at $0.3845 in play. However, barring an extended sell-off, XRP should avoid sub-$0.3750. The Second Major Support Level (S2) at $0.3769 should limit the downside. The Third Major Support Level (S3) sits at $0.3653.
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 $0.39058. The 50-day EMA eased back from the 100-day EMA, with the 100-day EMA pulling back from the 200-day EMA. The signals were bearish.
A breakout from the 50-day EMA ($0.39058) and the 100-day EMA ($0.39152) would support a move through R1 ($0.3961) to target R2 ($0.4001). The 200-day EMA sits at ($0.40018). However, failure to move through the 50-day ($0.39058) would leave S1 ($0.3845) and sub-$0.38 in play.