XRP Struggles as the Court Drags Its Feet and Gensler Talks Crypto Regs

Key Insights:

• On Sunday, XRP ended a four-day winning streak, falling by 0.76% to end the week at $0.35478.
• A lack of progress in the SEC v Ripple case left XRP on the back foot.
• However, the technical indicators are bullish, with XRP currently sitting above the 200-day EMA, supporting a return to sub-$0.40.

On Sunday, XRP fell by 0.76%. Reversing a 0.08% gain from Saturday, XRP ended the week up 6.95% to $0.3548.

After a range-bound morning session, XRP rose to a late high of $0.36045 before hitting reverse. Falling short of the First Major Resistance Level (R1) at $0.3621, XRP slid to a late low of $0.3493. XRP fell through the First Major Support Level (S1) at $0.3524 before a partial recovery to $0.3548.

With the US markets closed, a lack of progress in the SEC v Ripple case pegged XRP back.

A Lack of Progress in SEC v Ripple Case Tests Investor Patience

It was yet another quiet day for XRP holders, with the Courts dragging out the decision on the SEC’s latest objection to the ruling on the Hinman speech-related documents.

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.

In recent days, SEC Chair Gary Gensler has become more vocal on crypto regulation and classifying cryptos as securities. Some may question the timing of Gensler’s comments. The Court ruling on the SEC objection will materially influence the case. The consensus is that a decision in favor of the defendants could lead to a settlement.

Gensler may have realized that the SEC could lose the case and the authoritative power to regulate the digital asset space. On Friday, news hit the wires of the SEC setting up a new office to deal with crypto asset filings dubbed the “Office of Crypto Assets.”

XRP Price Action

At the time of writing, XRP was down 0.21% to $0.35404. A choppy morning saw XRP rise to an early high of $0.35764 before falling to a low of $0.34808.

XRP tested the First Major Support Level (S1) at $0.3492 early on.

Technical Indicators

XRP needs to move through the $0.3548 pivot to target the First Major Resistance Level (R1) at $0.3604 and the Sunday high of $0.36045.

A broad-based crypto rally would support a breakout from R1 ($0.3604) to bring the Second Major Resistance Level (R2) at $0.3660 and $0.37 into view. The Third Major Resistance Level (R3) sits at $0.3771. Any favorable court decisions from the ongoing SEC v Ripple case would support a breakout.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.3492 in play. Barring an extended sell-off, XRP should avoid sub-$0.3450 and the Second Major Support Level (S2) at $0.3437.

The Third Major Support Level (S3) sits at $0.3325.

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 $0.34511. The 100-day EMA narrowed to the 200-day EMA, with the 50-day EMA converging on the 200-day EMA. The price signals were bullish.

A bullish cross of the 50-day EMA through the 200-day EMA would support a run at R1 ($0.3604). However, a failed bullish cross would leave S1 ($0.3492), the 200-day EMA ($0.34511), and the 50-day EMA ($0.34441) in play.