XRP Price Pressure Subsides on Fed Sentiment to Bring $0.40 into View

Key Insights:

• On Thursday, XRP made it two in a row, with a 0.98% gain to end the session at $0.33991.
• Hawkish Fed Chair Powell chatter failed to spook investors as investors responded to the ECB’s hawkish policy decision.
• However, XRP technical indicators are turning bullish. XRP currently sits above the 200-day EMA, supporting a return to sub-$0.40.

On Thursday, XRP rose by 0.98%. Consolidating a 4.67% rally from Wednesday, XRP ended the day at $0.33991.

A bearish morning saw XRP fall to a mid-morning low of $0.32826. Avoiding the First Major Support Level (S1) at $0.3198, XRP rallied to a late high of $0.34292. However, falling short of the First Major Resistance Level (R1) at $0.3458, XRP ended the day at sub-$0.34.

It was another quiet day, with no Court rulings from the ongoing SEC v Ripple case to provide direction. The lack of progress in the SEC v Ripple case continues to leave XRP in the hands of market risk sentiment and investor sentiment towards central bank monetary policy.

Riskier Assets Ignore a Hawkish Fed Chair Powell Speech

Following hawkish FOMC member chatter earlier this week, Fed Chair Powell was in the spotlight on Thursday.

However, there were no surprises. Powell stood by his commitment to bring inflation to target without revealing anything new to spook investors.

Positive US economic indicators also failed to sink riskier assets despite better-than-expected jobless claims figures. On Thursday, the European Central Bank showed its teeth, hiking rates at a similar pace to that of the Fed, to mute the Powell effect. The move highlighted that the Fed is not alone in the battle against inflation.

The NASDAQ 100 rose by 0.60% to consolidate Wednesday’s 2.14% rally. This morning, the NASDAQ 100 Mini is up 122.25 points.

However, this morning’s XRP breakout could unwind should the Courts deliver a crucial decision in favor of the SEC.

In late July, the SEC filed an objection to a Court ruling denying the SEC motion to shield the Hinman speech-related documents under the attorney-client privilege. A decision on the SEC objection could come at any time.

By way of background, the former SEC Director of the Division of Corporation Finance, William Hinman, is a central figure in the SEC v Ripple case. In a famous 2018 speech, Hinman said that Bitcoin (BTC) and Ethereum (ETH) are not securities.

XRP Price Action

At the time of writing, XRP was up 3.33% to $0.35123. A bullish morning saw XRP rally from an early low of $0.33934 to a high of $0.35208.

XRP broke through the First Major Resistance Level (R1) at $0.3458 to test the Second Major Resistance Level (R2) at $0.3517.

Technical Indicators

XRP needs to avoid R1 and the $0.3370 pivot to retarget the Second Major Resistance Level (R2) at $0.3517 and the morning high of $0.35208.

A further pickup in appetite for riskier assets would support a breakout from the R2 to target resistance at $0.36. The Third Major Resistance Level (R3) sits at $0.3664. However, a Court ruling in favor of Ripple would support a return to $0.40.

A fall through R1 and the pivot would give the bears a run at the First Major Support Level (S1) at $0.3311. Barring another extended sell-off, XRP should avoid sub-$0.33 and the Second Major Support Level (S2) at $0.3224.

The Third Major Support Level (S3) sits at $0.3077.

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 $0.34318. The 100-day EMA closed in on the 200-day EMA, with the 50-day EMA narrowing to the 100-day EMA. The price signals were bullish.

An XRP hold above R1 ($0.3458) and the 200-day EMA ($0.34318) would support a run at R3 ($0.3664). A fall through R1 and the 200-day EMA could see XRP slide through the 100-day and the 50-day EMAs to bring the Major Support Levels into view.