XRP Price Pressure Returns as Investors Consider Regulatory News

Key Insights:

• On Friday, XRP rallied by 9.23%, reversing a 4.53% fall from Thursday.
• Updates from the SEC v Ripple case drew investor interest, with optimism towards a favorable conclusion supporting a breakout session.
• The technical indicators are bullish, with XRP sitting above the 200-day EMA, supporting a return to $0.40.

On Friday, XRP jumped by 9.23%. Reversing a 4.53% slide from Thursday, XRP ended the day at $0.35647.

A bearish start to the day saw XRP fall to an early morning low of $0.32155. Avoiding the First Major Support Level (S1) at $0.3197, XRP surged to a final hour high of $0.3575. XRP broke through the First Major Resistance Level (R1) at $0.3376 and the Second Major Resistance Level (R2) at $0.3489 to end the day at $0.35647.

There was no major SEC v Ripple Court event to deliver a breakout session. However, hopes of a favorable outcome to the SEC v Ripple case likely contributed to the Friday rally. The issue of the Hinman speech-related docs has yet to resurface, which could suggest some out of Court agreements.

Slow Progress in the SEC v Ripple Case Remains an XRP Headwind

Defense attorney James Filan shared the latest from the ongoing SEC v Ripple case overnight.

Filan said,

“Third Party B files a Motion to Seal requesting redactions to the declaration of Third-Party B filed by the SEC as an attachment to the SEC’s Motion for Summary Judgement.”

With the latest request insignificant to the outcome of the SEC v Ripple case, regulatory chatter may have contributed to the breakout session.

On Friday, Filan shared and made comments in a series of tweets in relation to regulatory news.

The first of the series of tweets included comments from Ripple defense lawyer Stuart Alderoty, who said,

“In today’s Senate banking Committee hearings, Chair Gensler misstated the Supreme Court test to determine what is and isn’t a security. Was it intentional, or does he really not know the law? Which is worse?”

Filan then shared the latest crypto framework from the White House. On Friday, the White House released the first-ever comprehensive framework for the Responsible Development of Digital assets.

Filan responded to the latest framework, saying,

“Consistent with their mandates. This is why the SEC is doing everything it possibly can to elbow the CFTC out and grab all the power it can to regulate the digital asset space.”

Filan shared one para from the report that stated,

“The reports encourage regulators like the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC), consistent with their mandates, to aggressively pursue investigations and enforcement actions against unlawful practices in the digital assets space.”

Filan went on to say,

“A lot going on today. On August 11, 2021, Republican Leader McHenry released a statement slamming SEC Chair Gary Gensler’s jurisdictional power grab of all exchanges of digital assets-not all of which are securities.”

Filan shared a tweet from the Financial Services GOP responding to the new Biden Administration digital asset reports that stated,

“Reports are not a substitute for legislative clarity. We must create a regulatory framework that fosters American innovation while also protecting consumers.”

The latest updates continued to demonstrate the lack of a cohesive partnership between the SEC and the CFTC. The crypto market is hoping for lawmakers to give the CFTC oversight of the digital asset space.

XRP Price Action

At the time of writing, XRP was down 1.59% to $0.35079. A bearish start to the day saw XRP fall from an early high of $0.35507 to a low of $0.34923.

Technical Indicators

XRP needs to avoid the $0.3452 pivot to target the First Major Resistance Level (R1) at $0.3688.

Following Friday’s breakout session, bullish sentiment from the broader market would support a run at the Second Major Resistance Level (R2) at $0.3811. The Third Major Resistance Level (R3) sits at $0.4171.

Any favorable Court decisions from the ongoing SEC v Ripple case or anti-SEC chatter would also support a breakout.

A fall through the pivot would bring the First Major Support Level (S1) at $0.3328 into play. Barring another extended sell-off, XRP should avoid sub-$0.33 and the Second Major Support Level (S2) at $0.3092.

The Third Major Support Level (S3) sits at $0.2733.

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

At the time of writing, XRP sat above the 200-day EMA, currently at $0.34385. This morning, the 50-day EMA crossed through the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA. Both signals were price negative.

A bullish cross of the 50-day EMA through the 200-day EMA would give the bulls a run at R2 ($0.3811) and $0.40. However, a fall through the 200-day EMA supports a slide through the 50-day and the 100-day EMAs to bring S1 ($0.3328) into play.