XRP Price Return to $0.40 Hinged on Fed Sentiment and the NASDAQ

Key Insights:

• On Monday, XRP rebounded from the deep red to end the day up 7.69%.
• Ahead of the US opening bell, Fed and recession fears gripped the crypto market before finding NASDAQ 100 support.
• The technical indicators are bullish, with XRP sitting above the 50-day EMA, supporting a return to $0.40.

On Monday, XRP rallied by 7.69%. Reversing a 5.34% slide from Sunday, XRP ended the day at $0.3847.

A bearish start to the day saw XRP fall to an early low of $0.34013. Finding support at the First Major Support Level (S1) at $0.3426, XRP rallied to a late high of $0.39330. XRP broke through the First Major Resistance Level (R1) at $0.3849 before easing back to end the day at $0.3847.

Sentiment towards the outcome of the SEC v Ripple case and a NASDAQ 100 rebound from early losses delivered the bullish session.

Earlier in the day, Fed and recession fears had weighed on riskier assets. Last Tuesday’s US CPI report raised the bets for a percentage point rate hike on Thursday and in November.

Optimism Outweighs Fed Fear as the Fed Readies for the September Move

XRP enjoyed a third breakout session from four, supported by the renewed investor optimism towards the SEC v Ripple case.

Outperforming the crypto top ten last week, XRP is out in front again. Over the weekend, the SEC and the Defendants (Ripple Labs, Brad Garlinghouse, and Chris Larsen) filed Motions for Summary Judgement ahead of schedule.

The crypto world is hoping for a swift conclusion and a favorable outcome. However, the Court scheduling and the latest from the SEC suggest an unlikely end until 2023, assuming no settlement. There is a question mark on whether the parties would agree to a settlement.

A sudden shift in focus from the William Hinman speech-related documents to the sealing of court documents suggests an out-of-court agreement. The defendants filed the motion for summary judgment without a Court ruling on the Hinman speech-related docs.

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.

Until late July, the SEC had battled to shield the Hinman documents under the attorney-client privilege.

XRP Price Action

At the time of writing, XRP was down 1.74% to $0.37800. A mixed start to the day saw XRP rise to an early high of $0.39000 before falling to a low of $0.37381.

Technical Indicators

XRP needs to avoid the $0.3727 pivot to target the Monday high of $0.3933 and the First Major Resistance Level (R1) at $0.4055.

Following Monday’s choppy session, we expect the NASDAQ 100 to continue to influence ahead of the Fed’s policy decision and FOMC projections.

Optimism and easing bets of a percentage point rate hike on Wednesday and November would support a run at the Second Major Resistance Level (R2) at $0.4259. The Third Major Resistance Level (R3) sits at $0.4791.

A fall through the pivot would bring the First Major Support Level (S1) at $0.3521 into play. Barring another extended sell-off, XRP should steer clear of sub-$0.34 and the Second Major Support Level (S2) at $0.3195.

The Third Major Support Level (S3) sits at $0.2664.

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 $0.35542. The 50-day EMA pulled away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA. The signals were price positives.

Monday’s breakout from the 50-day EMA supports a return to $0.40 for the first time since June 10. However, a fall through the 50-day EMA would give the bears a run at S1 ($0.3521) and the 100-day EMA ($0.34932).