XRP to Target $0.40 on Renewed Optimism Toward the SEC v Ripple Case

Key Insights:

• On Tuesday, XRP bucked a bearish crypto market trend for a second session, rising by 2.68% to end the day at $0.38015.
• Investors brushed aside hawkish Fed Chair Powell testimony, with updates from SEC v Ripple case delivering XRP price support.
• The technical indicators turned bullish, signaling a return to $0.40.

On Tuesday, XRP rose by 2.68%. Following a 0.92% gain on Monday, XRP ended the day at $0.38015. Significantly, XRP wrapped up the day at $0.38 levels for the first time in six sessions.

A bearish start to the day saw XRP fall to an early morning low of $0.36702. Steering clear of the First Major Support Level (S1) at $0.3619, XRP rallied to a late high of $0.38430. XRP broke through the First Major Resistance Level (R1) at $0.3761 and briefly through the Second Major Resistance Level (R2) at $0.3820 before easing back to end the day at $0.38015.

SEC v Ripple Case Rulings Deliver XRP Price Support

Investors responded further to Monday’s Court rulings from the SEC v Ripple case. Presiding Judge Torres granted and denied motions from both sides. However, the Courts denied more motions from the SEC to exclude expert witness testimony, placing the Defendants on a better footing.

The latest Court rulings put the market focus back on the SEC v Ripple case, the outcome of which could prove pivotal for the broader digital asset space. A lack of a crypto regulatory framework has enabled the SEC to regulate by enforcement.

Ripple CEO Brad Garlinghouse had this to say,

“The headwinds keep growing – with the SEC declaring war on crypto, Chair Gensler continues to harp that firms simply need to come in and register, but the truth is there’s no infrastructure in place for a registered token to trade nor any clarity as to what these tokens are.”

The Ripple CEO added,

“If you want to regulate, then regulate. Put in the hard work to build a framework and set guidance, as so many other G20 countries are already doing. The 27 EU member countries can agree on a set of rules with MiCA… What’s stopping the US?!”

The Day Ahead

Further updates and commentary from the SEC v Ripple case should have more influence than other crypto events. Following the Court rulings on Monday, investors will be eyeing Court decisions relating to the Hinman Documents that could have a material impact on the case.

Investors await a ruling on an SEC Motion to Redact certain content after failing to shield the entirety of the Hinman documents under the attorney-client privilege. A ruling against the SEC could raise speculation of a likely settlement.

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.”

By way of background, William Hinman remains a central figure in the SEC v Ripple case. 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 2018 speech relates to Hinman’s connection with Simpson Thacher. Simpson Thacher is part of a group that promotes Enterprise Ethereum. After leaving the SEC, Hinman returned to Simpson Thacher.

However, a lack of updates would leave XRP in the hands of the crypto news wires.

Investors should continue monitoring Binance, FTX, and Silvergate Bank-related news. Regulatory activity and lawmaker chatter will likely remain the focal point.

This afternoon, Fed Chair Powell will also be back in focus. Giving testimony to lawmakers on Capitol Hill, more hawkish chatter and solid US labor market indicators could test buyer appetite. US ADP nonfarm employment change and JOLTs Job Openings will be in focus this afternoon.

XRP Price Action

At the time of writing, XRP was up 0.69% to $0.38278. A mixed start to the day saw XRP fall to an early low of $0.37998 before rising to a high of $0.38569.

Technical Indicators

XRP needs to avoid the $0.3772 pivot to target the First Major Resistance Level (R1) at $0.3873. A return to $0.3850 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 $0.3944 and resistance at $0.40. The Third Major Resistance Level (R3) sits at $0.4117.

A fall through the pivot would bring the First Major Support Level (S1) at $0.3700 into play. However, barring an extended broad-based crypto sell-off, XRP should avoid sub-$0.36 and the Second Major Support Level (S2) at $0.3599. The Third Major Support Level (S3) sits at $0.3426.

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

At the time of writing, XRP sat above the 200-day EMA, currently at $0.38285. The 50-day EMA narrowed to the 100-day EMA, with the 100-day EMA closing in on the 200-day EMA. The signals were bullish.

An XRP breakout from the 200-day EMA ($0.38285) would support a move through R1 ($0.3873) to give the bulls a run at R2 ($0.3944) and $0.40. However, a fall through the 200-day ($0.38285) and 100-day ($0.37853) EMAs would bring the 50-day EMA ($0.37465) and S1 ($0.3700) into view. An XRP fall through the 50-day EMA would send a bearish signal.