XRP Risks Sub-$0.49 with no End to the SEC v Ripple Case in Sight

Key Insights:

• On Saturday, XRP tracked the broader crypto market trend, falling by 1.50% to end the day at $0.50537.
• SEC v Ripple chatter failed to deliver support, with rising bets of a Fed interest rate hike and regulatory risk weighing.
• However, the technical indicators remain bullish, signaling a return to $0.55.

On Saturday, XRP fell by 1.50%. Partially reversing a 1.98% gain from Thursday, XRP ended the day at $0.50537. Despite the bearish session, XRP avoided sub-$0.50 for the first time in six sessions.

Bearish throughout the session, XRP fell from an opening price high of $0.51294 to a late afternoon low of $0.50300. However, steering clear of the First Major Support Level (S1) at $0.5018, XRP revisited the $0.5070 handle before easing back.

SEC v Ripple Chatter Leave XRP Investors on the Sidelines

It was another quiet day for the SEC v Ripple case, with no updates to provide direction. The lack of updates left XRP in the hands of the broader crypto market.

Investors responded further to the US Jobs Report from Friday, with rising bets of a 25-basis point Fed rate hike doing the damage.

SEC v Ripple chatter drew interest, with pro-crypto lawyer Bill Morgan sharing his views on the case. On Friday, Bill Morgan had this to say,

“It was surprising to me that the SEC’s own expert conceded that since mod-2018 onwards that bitcoin and ethereum price movement can explain as much as 90% of XRP’s price movement.”

Morgan was addressing the following statement,

“Here the SEC’s own expert concludes that, from mid-2018 onward, bitcoin and ether returns can explain as much as almost 90% of XRP returns. The SEC offers no serious response and simply denies that the cases say what they say in establishing this legal rule.”

While Morgan shared his views, Amicus Curiae defense attorney John Deaton was also active on Twitter, saying,

“When people talk about the negative impact of the SEC’s case against Ripple and XRP, here’s an example. Tapjets and thousands of other vendors accept XRP. But some major companies will not touch it due to the lawsuit.”

Deaton’s comments were bearish, with the ongoing case impacting increased XRP usage.

The Day Ahead

Investors should track the crypto news wires and Twitter chatter. SEC v Ripple case chatter will provide direction. However, the SEC v Ripple silence will leave regulatory activity in the spotlight. Binance and Coinbase (COIN) commentary will also move the dial.

XRP Price Action

At the time of writing, XRP was up 0.34% to $0.50710. A bullish start to the day saw XRP rise from an early low of $0.50504 to a high of $0.50710.

Technical Indicators

XRP needs to avoid a fall through the $0.5071 pivot to target the First Major Resistance Level (R1) at $0.5112 and the Saturday high of $0.51294. A return to $0.51 would signal a bullish session. However, 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 $0.5170 and resistance at $0.52. The Third Major Resistance Level (R3) sits at $0.5270.

A fall through the pivot would bring the First Major Support Level (S1) at $0.5013 into play. However, barring an extended sell-off, XRP should avoid sub-$0.4950. The Second Major Support Level (S2) at $0.4972 should limit the downside. The Third Major Support Level (S3) sits at $0.4872.

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

At the time of writing, XRP sat above the 50-day EMA, currently at $0.50596. The 50-day EMA moved away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA. The EMAs delivered bullish signals.

A hold above the 50-day EMA ($0.50596) would support a breakout from R1 ($0.5112) to target R2 ($0.5170) and $0.52. However, a fall through the 50-day EMA ($0.50596) would bring S1 ($0.5013) and sub-$0.50 into view. A fall through the 50-day EMA would send a bearish signal.