XRP Returns to $0.40 as the SEC v Ripple Case Takes a New Twist

Key Insights:

• On Wednesday, XRP joined the broader market in the green, rallying by 4.95% to end the day at $0.40119.
• Easing regulatory risk, US lawmaker support, and SEC v Ripple updates delivered the bullish session.
• The technical indicators turned bullish, signaling a return to sub-$0.42.

On Wednesday, XRP rallied by 4.95%. Following a 3.13% gain on Tuesday, XRP ended the day at $0.40119. XRP wrapped up the day at $0.40 for the first time since February 7.

A bearish start to the day saw XRP fall to an early morning low of $0.37675. Steering clear of the First Major Support Level (S1) at $0.3702, XRP rallied to a late high of $0.40236. XRP broke through the First Major Resistance Level (R1) at $0.3890 and the Second Major Resistance Level (R2) at $0.3958 to end the day at $0.40119.

US Lawmakers Raise Question Marks Over Gensler Tactics

Updates from the SEC v Ripple case drew interest on Wednesday. Defense attorney James Filan shared the latest, saying,

“Dr. Roslyn Layton, PhD. has filed a Motion to Intervene to petition the Court for access to the Hinman Speech Documents.”

The filing highlighted that Dr. Layton has written numerous articles about the Hinman Speech Documents, examining the central role those documents play in the case, which she has dubbed ‘the crypto trial of the century.’

As in the case of Empower Oversight v SEC, the filing highlighted the potential conflicts of interest, because Hinman had a financial stake in promoting Ethereum over competing coins like XRP.

Former SEC Director of the Division of Corporation Finance William Hinman said that Bitcoin (BTC) and Ethereum (ETH) are not securities. The contentious issue with the speech related to Hinman’s connection with Simpson Thacher, which is part of a group that promotes Enterprise Ethereum. After leaving the SEC, Hinman returned to Simpson Thacher.

Before the SEC Summary Judgement Reply brief filing, the SEC had made at least six attempts to shield the documents under the attorney-client privilege.

Speaking from Davos in January, Ripple CEO Brad Garlinghouse shared his views on the speech-related documents, saying,

“When those come to light, I think you will see more kind of like, how is it possible for the SEC to decide to bring a case against Ripple given what they were saying within their own walls.”

The filing gives presiding Judge Torres another Hinman speech-related document ruling to consider and another reason for the SEC to consider settling.

The Day Ahead

It could be a choppy session. US lawmaker chatter and SEC activity will continue to influence investor sentiment. Following crypto-friendly lawmaker chatter on Capitol Hill, anti-crypto lawmakers could look to regain the initiative this afternoon. The collapse of FTX and the ongoing SEC v Ripple case are two areas of interest.

Favorable lawmaker commentary on Capitol Hill would continue to provide price support. Following the Senate Banking Committee hearing on Tuesday, investors will likely hope for greater lawmaker scrutiny of SEC regulation by enforcement, which would be positive for the crypto market.

For the SEC, the ongoing battle against Ripple remains pivotal. A loss could see lawmakers hand the reins over to the CFTC. It may boil down to whether the SEC can shield the William Hinman speech-related documents from the public arena.

Investors need to monitor the crypto news wires for SEC v Ripple updates today. However, a lack of updates would leave XRP in the hands of the broader crypto market. US lawmaker chatter and SEC regulatory activity remain the focal points.

XRP Price Action

At the time of writing, XRP was down 0.20% to $0.40039. A mixed start to the day saw XRP rise to an early high of $0.40447 before falling to a low of $0.39687.

Technical Indicators

XRP needs to avoid a fall through the $0.3934 pivot to target the First Major Resistance Level (R1) at $0.4101. A move through the morning high of $0.40447 would signal a bullish session. However, the broader crypto market and SEC v Ripple chatter would need to support a breakout.

In the case of another extended rally, XRP would likely test the Second Major Resistance Level (R2) at $0.4190 and resistance at $0.4250. The Third Major Resistance Level (R3) sits at $0.4447.

A fall through the pivot would bring the First Major Support Level (S1) at $0.3845 into play. However, barring an extended broad-based crypto sell-off, XRP should avoid sub-$0.38 levels and the Second Major Support Level (S2) at $0.3678. The Third Major Support Level (S3) sits at $0.3422.

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

At the time of writing, XRP sat above the 100-day EMA, currently at $0.39042. The 50-day EMA narrowed to the 200-day EMA, with the 100-day EMA pulling away from the 200-day EMA after a Wednesday bullish cross. The signals were bullish.

A bearish cross of the 50-day EMA through the 200-day and 100-day EMAs would support a breakout from R1 ($0.4101) to target R2 ($0.4190) and $0.4250. However, a fall through the 100-day ($0.39042) and 200-day ($0.39023) EMAs would bring the 50-day EMA ($0.38574) and S1 ($0.3845) into play. A fall through the 50-day EMA would send a bearish signal.