XRP to Target $0.42 on US Stats as Investors Await SEC v Ripple Rulings

Key Insights:

• On Thursday, XRP fell by 1.86% to end the day at $0.40947.
• FTX bankruptcy news weighed on investor sentiment, while SEC v Ripple updates took a back seat.
• However, the technical indicators remain bullish, with XRP sitting above the 100-day EMA, signaling a return to $0.45.

On Thursday, XRP fell by 1.86%. Partially reversing a 2.26% gain from Wednesday, XRP ended the day at $0.40947. Despite the bearish session, XRP avoided a return to sub-$0.40 levels.

Bearish throughout the session, XRP fell from an early high of $0.41729 to a late afternoon low of $0.40549. However, steering clear of the First Major Support Level (S1) at $0.4020, XRP revisited $0.41347 before falling back into the deep red.

FTX Credit List Overshadows Upbeat US Economic Indicators

There were no updates from the ongoing SEC v Ripple case to distract investors on Thursday. The lack of updates left XRP in the hands of US economic indicators, corporate earnings, and the crypto news wires.

US Q4 GDP and jobless claims beat expectations supporting a bullish NASDAQ Index session. However, tighter labor market conditions and a better-than-expected Q4 could give the Fed hawks more wriggle room to lift rates higher, which curtailed an attempted afternoon recovery.

While corporate earnings supported the NASDAQ Index, FTX news weighed on crypto investor sentiment. The release of the FTX creditor list delivered the crypto market with a reality check, raising the threat of more draconian-style regulatory measures to limit the impact of the crypto market on more traditional asset classes.

Regulation by enforcement continues to weigh on investor sentiment as the SEC looks to bring the digital asset space under its purview. Losing the case to Ripple would likely hand the reins to the CFTC, which would be the more favored outcome for the crypto market.

William Hinman Speech-Related Documents Remain a Focal Point

Considering the SEC’s position in the SEC v Ripple case, the William Hinman speech-related documents could decide which regulatory authority regulates the digital asset space. A ruling in favor of the Defendants could force the SEC down the settlement path or face disclosing the content of the speech-related documents.

As background, 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 speech related to Hinman’s connection with Simpson Thacher, which is part of a group that promotes Enterprise Ethereum. After leaving the SEC, Hinman returned to Simpson Thacher.

Before the filing for redactions, the SEC had made at least six attempts to shield the speech-related documents under attorney-client privilege. Last week, Ripple CEO Brad Garlinghouse had this to say about the Hinman documents,

“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.”

The Day Ahead

Today, investors should monitor updates from the SEC v Ripple case. However, a lack of updates would leave the broader crypto market to provide direction. FTX and Genesis updates will remain key drivers. US economic indicators will draw interest this afternoon. Inflation, personal spending, and personal income are in focus.

A pickup in spending and inflation would weigh on the NASDAQ Index and the broader crypto market.

XRP Price Action

At the time of writing, XRP was down 1.39% to $0.40379. A mixed start to the day saw XRP rise to an early high of $0.41052 before falling to a low of $0.39899. XRP fell through the First Major Support Level (S1) at $0.4042 to test the Second Major Support Level (S2) at $0.3990.

Technical Indicators

XRP needs to move through S1 and the $0.4108 pivot to target the First Major Resistance Level (R1) at $0.4160. A return to $0.4100 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 another extended rally, XRP would likely test the Second Major Resistance Level (R2) at $0.4226 and resistance at $0.4250. The Third Major Resistance Level (R3) sits at $0.4344.

Failure to move through S1 and the pivot would leave the Second Major Support Level (S2) at $0.3990 in play. However, barring another extended sell-off, XRP should avoid sub-$0.3900 and the Third Major Support Level (S3) at $0.3872.

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

At the time of writing, XRP sat above the 100-day EMA, currently at $0.39461. The 50-day EMA narrowed to the 100-day EMA, while the 100-day EMA widened from the 200-day EMA. The signals were mixed.

A breakout from the 50-day EMA ($0.40570) would support a move through R1 ($0.4160) to target R2 ($0.4226) and $0.4250. However, a fall through S2 ($0.3990) and the 100-day EMA ($0.39461) would bring S3 ($0.3872) into view. A move through the 50-day EMA would send a bullish signal.