XRP Tracks the Broader Market into the Red, with Sub-$0.385 in View

Key Insights:

• On Friday, XRP slipped by 0.20%. Bucking the crypto top ten trend, XRP ended the day at $0.39584.
• Investor jitters towards the SEC v Ripple case left XRP on the back foot as the broader market reacted to the US Jobs Report.
• The technical indicators are bearish, with XRP below the 50-day EMA, signaling a possible return to $0.35.

On Friday, XRP slipped by 0.20%. Following a 2.75% loss from Thursday, XRP ended the day at $0.39584. XRP fell short of $0.40 for the first time in four sessions.

A mixed start to the day saw XRP rise to an early high of $0.39732. Coming up short of the First Major Resistance Level (R1) at $0.4057, XRP slid to an early morning low of $0.38367. XRP fell through the First Major Support Level (S1) at $0.3910 and the Second Major Support Level (S2) at $0.3854.

However, finding broader market support through the afternoon, XRP revisited $0.3964 levels before easing back.

SEC v Ripple Jitters Mutes Broader Crypto Market Support

XRP failed to recover from a bearish start to the Friday session. Investor uncertainty towards Friday’s US Jobs Report and apprehension towards the ongoing SEC v Ripple case weighed early in the session.

However, while finding broader crypto market support through the afternoon session, XRP failed to wrap up the day in positive territory alongside the rest of the crypto top ten.

Overnight, the SEC and the defendants in the SEC v Ripple case filed redacted Summary Judgment Reply briefs.

Defense attorney James Filan shared the redacted filings. Within the defendants’ redacted filing, the Defendants targeted the Howey Test, noting that the SEC’s Brief confirms it cannot prove an Investment of Money or a Common Enterprise and looked to demonstrate that XRP holders do not reasonably expect profits from the defendants’ efforts.

However, references to the Hinman speech-related documents were limited, questioning whether the reply brief would force the SEC into an early settlement.

The Defendants did address the SEC’s reference to the LBRY case, stating,

“The recent decision in LBRY also does not help the SEC with respect to fair notice. There, the Court rejected the defendant’s fair notice defense because it was “nothing more” than a “bald claim” without any supporting evidence behind it.”

The brief went on to say,

“Here, the Defendants have demonstrated, in exacting detail supported by existing evidence, that market participants did not believe XRP was a security, that they lacked guidance as to what the law prohibited in this area, and that the SEC knowingly injected further confusion into the marketplace through its contradictory guidance, all of which confirmed in any event that XRP should not be considered a security.”

With the redacted reply briefs available to investors, the next date in the Court schedule is December 22, when parties must file omnibus motions.

Between now and December 22, investors may be hoping for a settlement. The decision to include a reference to the Hinman speech places the speech-related documents in the spotlight.

In a famous 2018 speech, Division of Corporation Finance, William Hinman, said that Bitcoin (BTC) and Ethereum (ETH) are not securities.

This morning, XRP showed little reaction to the redacted filings, with investors looking for the next steps. It remains to be seen whether the SEC or the Defendants will comment before December 22, which would leave XRP at risk of a reversal of recent gains.

XRP Price Action

At the time of writing, XRP was down 1.31% to $0.39066. A mixed start to the day saw XRP rise to an early high of $0.39599 before falling to a low of $0.38769.

Technical Indicators

XRP needs to move through the $0.3923 pivot to target the First Major Resistance Level (R1) at $0.4009. A return to $0.40 would signal a bullish session.

In the case of an extended rally,  the Second Major Resistance Level (R2) at $0.4059 would come into play. The Third Major Resistance Level (R3) sits at $0.4196.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.3872 in play. However, barring an extended sell-off, XRP should avoid sub-$0.38 and the Second Major Support Level (S2) at $0.3786. The Third Major Support Level (S3) sits at $0.3650.

Chatter relating to Friday’s redacted Summary Judgment Reply briefs will draw interest.

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 $0.39294. The 50-day EMA converged on the 100-day EMA, while the 100-day EMA eased back from the 200-day EMA. The signals were bearish.

A breakout from the 100-day EMA ($0.39283) and the 50-day EMA ($0.39294) would support a run at R1 ($0.4009) and the 200-day EMA ($0.40287). However, a fall through the 50-day and the 100-day EMAs would leave XRP under pressure and bring S1 ($0.3872) into play.