XRP Set for a Bearish Session on Terraform Labs Case News

Bob Mason
Published: Aug 2, 2023, 02:33 GMT+00:00

After modest gains on Tuesday, XRP was back in the red this morning. The number of headwinds are rising as SEC appeal uncertainty lingers.

XRP Tech Analysis - FX Empire

In this article:

Key Insights:

  • On Tuesday, XRP ended a five-day losing streak, gaining 1.20% to end the day at $0.7067.
  • News of MicroStrategy planning to acquire BTC supported the broader market, while updates from the Terraform Labs case caped the upside.
  • However, shorter-term technical indicators remain bearish, supporting a return to sub-$0.65.

On Tuesday, XRP gained 1.20%. Reversing a 0.91% loss from Monday, XRP ended the day at $0.7067. XRP ended a five-day losing streak.

Weekly Chart sends bullish price signals.
XRPUSD 020823 Weekly Chart

XRP Price Action

Daily Chart

The Daily Chart showed XRP/USD remained below the $0.7870 – $0.7737 resistance band, despite ending the five-day losing streak. However, XRP sat well above the 50-day ($0.6229) and 200-day ($0.5102) EMAs, sending bullish near and longer-term price signals.

Notably, the 50-day EMA pulled further away from the 200-day EMA, affirming a bullish near-term trend. While the EMAs send bullish signals, the five-day losing streak left XRP within reach of the $0.6530 – $0.6417 support band.

Looking at the 14-Daily RSI, the 56.19 reading sends bullish XRP price signals, aligning with the EMAs. The RSI supports a run at $0.75 to bring the $0.7870 – $0.7737 resistance band into play.

XRP Daily Chart sends bullish price signals.
XRPUSD 020823 Daily Chart

4-Hourly Chart

Looking at the 4-Hourly Chart, the XRP/USD faces strong resistance at the 50-day EMA ($0.7089). Despite the bullish Tuesday session, XRP/USD remains below the $0.7870 – $0.7737 resistance band.

XRP also sits below the 50-day EMA ($0.7089) while holding above the 200-day EMA ($0.6520), sending bearish near-term but bullish longer-term price signals. The 50-day EMA narrowed on the 200-day EMA, signaling a fall toward $0.65.

The 14-4H RSI reading of 49.14 signals moderately bearish sentiment, with selling pressure outweighing buying pressure. Significantly, the RSI aligns with the 50-day EMA, signaling the near-term bullish trend reversal and a run at the $0.6530 – $0.6417 support band and the 200-day EMA ($0.6520).

XRP 4-Hourly Chart sends bearish near-term price signals.
XRPUSD 020823 4 Hourly Chart

MicroStrategy Delivers Support Despite Terraform Labs News

It was another busy session on Tuesday, with earnings and SEC v Ripple-related news moving the dial.

This week, MicroStrategy (MSTR) filed a request to sell up to $750 million in stock to acquire BTC. According to the quarterly report for the quarter ending June 30, 2023, MicroStrategy held 152,333 BTC. The anticipated increase in BTC holdings supported the BTC return to $30,000.

However, news of Tron (TRX) founder Justin Sun acquiring CRV also provided market support.

Despite the bullish moves, XRP trailed the broader market as investors digested Terra Labs Court case-related news.

Terraform Labs presiding Judge Jed Rakoff, caused a stir by saying that Judge Torres made a mistake in the SEC v Ripple Court ruling when declaring that XRP was not a security when sold on exchanges. Rakoff believed that there is no difference between stocks or institutional sales in terms of being a security.

Ripple Chief Legal Officer Stuart Alderoty responded to the latest news from the Terraform Labs case, saying,

“Let me be clear about some confusion going around – the ruling in the Terra case changes NOTHING about the Ripple ruling that XRP is not a security.”

Alderoty went on to say,

“The Terra case is just starting, and that Judge has to accept everything that the SEC alleges as true (for now). Our ruling came after a full factual record (developed over 2+ years) was presented to the Court.”

The Ripple CLO concluded,

“I’ll let others dive into the Terra Judge’s comment, including his apparent misreading of the Ripple Judge’s reasoning – ex: missing the point that secondary market traders can’t investor money in anyone or anything if they don’t know who they are buying from.”

The Day Ahead

SEC v Ripple Court ruling-related chatter will remain the focal point. However, investors should continue to monitor the crypto news wires. SEC activity and US lawmaker chatter will move the dial.

Terra Labs updates, and ETF, Binance, and Coinbase-related news also need consideration.

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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