XRP Price Action Turns Bearish with Sub-$0.30 in Play on FTX Contagion

Key Insights:

• On Sunday, XRP slid by 6.03%, ending a three-day winning streak.
• Ripple updates and sentiment toward the SEC v Ripple case took a back seat as contagion fear resurfaced.
• The technical indicators are bearish, with XRP sitting below the 50-day EMA, signaling a possible return to sub-$0.30.

On Sunday, XRP slid by 6.03%. Reversing a 0.38% gain from Saturday, XRP ended the week up 6.03% to $0.36081. Notably, XRP ended a three-day winning streak and fell to sub-$0.36 for the first time in six sessions.

A bullish start to the day saw XRP rise to an early morning high of $0.39540. XRP broke through the First Major Resistance Level (R1) at $0.3894. Coming up against the Second Major Resistance Level (R2) at $0.3949, XRP slid to a late low of $0.35852. XRP fell through the First Major Support Level (S1) at $0.3769 and the Second Major Support Level (S2) at $0.3698 to end the day at $0.36081.

Contagion fear resurfaced on Sunday, sending XRP and the broader crypto market into the red. The reversal came despite a string of bullish Ripple news updates that brought XRP within reach of $0.40 before hitting reverse.

Contagion Overshadows Positive Ripple News to Send XRP into the Deep Red

On Sunday, news hit the wires of FTX owing its 50 largest creditors close to $3.1 billion. According to reports, FTX owes its top ten creditors $1.45 billion. The figures raised the prospects of more crypto platforms following FTX into bankruptcy. However, the news did not identify the creditors by name.

The Sunday loss came despite a string of positive Ripple updates. On Saturday, Ripple CEO Brad Garlinghouse talked to the media, saying that Ripple would be interested in acquiring parts of FTX that benefit business customers and stakes in other companies.

While the Ripple CEO did not identify assets or stakes, the intent demonstrated Ripple’s liquidity position.

However, there were no updates from the ongoing SEC v Ripple case to influence. The November 18 deadline for Amicus Brief filings has passed.

Investor optimism toward the outcome of the SEC v Ripple case remains positive. The following counterparties and representatives filed Amicus Briefs by the November 18 deadline:

Chamber of Digital Commerce, I-Remit, TapJets, I-CAN, Spend-the-Bits, Coinbase, The Blockchain Association, Paradigm Ops, VeriDAO, Reaper Financial, CCI, Cryptillian, NSEI, Valhil Capital, and John Deaton on behalf of XRP holders.

The investor focus now turns to November 30. Parties must file summary judgment reply briefs temporarily under seal by the end of the month. We expect the reply briefs to influence, with some uncertainty surrounding how the SEC will tackle the Amicus Briefs and incorporate the LBRY victory into its case.

Today, while updates from the SEC v Ripple case and network updates will influence, contagion risk will remain the key driver.

XRP Price Action

At the time of writing, XRP was down 0.76% to $0.35805. A mixed start to the day saw XRP rise to an early high of $0.36157 before falling to a low of $0.35439.

Technical Indicators

XRP needs to move through the $0.3716 pivot to target the First Major Resistance Level (R1) at $0.3846 and the Sunday high of $0.3954. A return to $0.38 would signal a breakout session.

In the case of an extended rally, the bulls would take a run at $0.40 and the Second Major Resistance Level (R2) at $0.4085. The Third Major Resistance Level (R3) sits at $0.4453.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.3478 in play. Barring another extended sell-off, XRP should avoid sub-$0.34 and the Second Major Support Level (S2) at $0.3347. The Third Major Support Level (S3) sits at $0.2978.

However, news of crypto platforms freezing withdrawals or filing for bankruptcy would bring sub-$0.30 into view.

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 $0.37968. The 50-day EMA slid back from the 100-day EMA, with the 100-day EMA easing back from the 200-day EMA. The signals were bearish.

A move through the 50-day EMA ($0.37968) would give the bulls a run at R1 ($0.3846) and the 100-day EMA ($0.39498). However, a failure to move through the 50-day EMA ($0.37968) would give the bears a run at S1 ($0.3478). The 200-day EMA sits at $0.41598.