XRP to Target $0.38 to Bring $0.40 into Play on SEC v Ripple Optimism

Key Insights:

• On Friday, XRP saw a second consecutive day in the red, falling by 0.02% to end the day at $0.37115.
• US banking sector woes weighed on investor sentiment, overshadowing renewed SEC v Ripple optimism.
• The technical indicators remained bearish, signaling a return to sub-$0.35.

On Friday, XRP slipped by 0.02%. Following a 4.57% slide on Thursday, XRP ended the day at $0.37115. Significantly, XRP visited sub-$0.36 for the first time in four sessions.

A mixed start to the day saw XRP rise to an early high of $0.37468 before hitting reverse. Falling short of the First Major Resistance Level (R1) at $0.3908, XRP fell to a late morning low of $0.35744. However, finding support at the First Major Support Level (S1) at $0.3580, XRP revisited the $0.373 handle before falling back into the red.

Hopes of a Ripple Win in the SEC v Ripple Case Delivered Support

It was another quiet session on Friday, with no SEC v Ripple case updates to distract investors from the crypto news wires and the US economic calendar.

Amidst heightened regulatory and lawmaker scrutiny, US banking woes fueled contagion fear. News of US regulators shutting down SVB Financial Group (SIVB) weighed on investor appetite for riskier assets.

The all-important US Jobs Report also tested investor sentiment. Better-than-expected nonfarm payroll numbers fueled bets of a more aggressive Fed policy outlook. However, softer wage growth and an unexpected rise in unemployment limited the damage.

Despite the gloomy session, XRP ended the day relatively flat. Hopes of a Ripple victory in the SEC v Ripple case continued to deliver support. XRP bucks the broader crypto market trend this week. XRP is currently up 1.03%, while the crypto market cap is down 7.2%.

The mid-week Court rulings on expert testimonies tilted the scales in Ripple’s favor. Ripple Defense counsel Stuart Alderoty provided a detailed breakdown of the Court rulings. Alderoty noted,

“Our experts that explain how Ripple’s contracts clearly differ from those in Howey, the tax treatment of XRP (not a security), accounting treatment of XRP (not a security), and currency experts on XRP (not a security) are allowed to stay in.”

Alderoty concluded,

“As we have said throughout, we have always felt confident about our case and with each ruling, even more so.”

In a series of rulings, denying and granting motions from both sides, the Court ruled to exclude the SEC expert testimony on the ‘reasonable expectations of an XRP purchaser.

The Day Ahead

Investors should continue monitoring Binance and FTX news as regulators scrutinize the digital asset space. Regulatory activity and lawmaker chatter are the focal points.

However, SEC v Ripple case updates will remain the key driver.

For investors concerned with the possible ramifications of the Silvergate Bank collapse, the closure of SVB Financial Group should ease the fear of immediate lawmaker reprisals.

Amicus Curiae defense attorney John Deaton had this to say,

“8 banks holding $9.8B in reserves. If spread equally, it would still be over $1B at SVB. The question is how many other banks are facing the same MBS issue as SVB? I would assume there is some kind of emergency FED meeting taking place this weekend.”

XRP Price Action

At the time of writing, XRP was up 0.55% to $0.37318. A mixed start to the day saw XRP fall to an early low of $0.36976 before rising to a high of $0.37718.

Technical Indicators

XRP needs to avoid the $0.3678 pivot to target the First Major Resistance Level (R1) at $0.3781. A move through the morning high of $0.37718 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 an extended rally, XRP would likely test the Second Major Resistance Level (R2) at $0.3850 and resistance at $0.39. The Third Major Resistance Level (R3) sits at $0.4022.

A fall through the pivot would bring the First Major Support Level (S1) at $0.3608 into play. However, barring an extended broad-based crypto sell-off, XRP should avoid sub-$0.35. The Second Major Support Level (S2) at $0.3505 should limit the downside. The Third Major Support Level (S3) sits at $0.3333.

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

At the time of writing, XRP sat below the 50-day EMA, currently at $0.37662. The 50-day EMA fell back from the 100-day EMA, with the 100-day EMA easing back from the 200-day EMA. The signals were bearish.

A move through the 50-day EMA ($0.37662) would support a breakout from R1 ($0.3781) and the 100-day EMA ($0.37876) to bring the 200-day EMA ($0.38223) into view. However, failure to move through the 50-day EMA ($0.37662) would leave S1 ($0.3608) in play.