Ripple Lawsuit Updates Provide Little XRP Price Support

Key Insights:

• It was a bearish Sunday for XRP, which fell by 1.02% before this morning’s sell-off.
• News updates on the SEC v Ripple case fail to provide price support.
• Key technical indicators are bearish, with XRP sitting well below the 50-day EMA.

Ripple’s XRP has been under pressure since late March. The bearish sentiment from the broader crypto market has pulled XRP back to sub-$0.80 levels.

Ripple v SEC news updates have been few and far between, leaving XRP at the mercy of the crypto markets.

Over the weekend, news updates are more XRP bullish. With uncertainty over the outcome of the  SEC v Ripple case, however, investors have stepped back as judgment day approaches.

Ripple Execs File Defendant Answers

On Friday, Brad Garlinghouse and Chris Larsen filed the Individual Defendants’ Answers. Defense lawyer James Filan took to Twitter to provide updates on the SEC versus Ripple case.

On Saturday, Filan tweeted,

“Scheduling Update: Now that the Individual Defendants’ Answers have been filed, the SEC’s position on additional discovery is due on April 15, 2022, and the Joint Proposed Scheduling Order is due on April 22, 2022.”

#XRPCommunity #SECGov v. #Ripple #XRP Scheduling Update: Now that the Individual Defendants’ Answers have been filed, the SEC’s position on additional discovery is due on April 15, 2022, and the Joint Proposed Scheduling Order is due on April 22, 2022.

— James K. Filan 🇺🇸🇮🇪90k+ (beware of imposters) (@FilanLaw) April 8, 2022

Filan went on to tweet,

“Also, we’re still waiting for decisions on the SEC’s Motion for Partial Reconsideration, the Defendants’ Motions to Strike the Supplemental Export Report, the Defendants’ Motion to Compel Turnover of the Estabrook notes, and the decisions on the SEC’s proposed redactions.”

Also, we’re still waiting for decisions on the SEC’s Motion for Partial Reconsideration, the Defendants’ Motion to Strike the Supplemental Expert Report, the Defendants’ Motion to Compel Turnover of the Estabrook notes, and the decision on the SEC’s proposed redactions.

— James K. Filan 🇺🇸🇮🇪90k+ (beware of imposters) (@FilanLaw) April 8, 2022

The Estabrook notes detail the November 2018 meeting between Brad Garlinghouse and SEC commissioner Elad Roisman.

For Ripple and the SEC, the filing of the Individual Defendants’ Answers was the key event, setting the timeline for the Joint Proposed Scheduling Order. The Joint Proposed Scheduling Order will occur one week after the SEC submits any further discovery requirements.

The Individual Defendants’ Answers reportedly outline requirements to conclude the SEC versus Ripple lawsuit.

Requirements included,

• dismiss the action with prejudice;
• Enter the judgment in favor of the Defendants against Plaintiff concerning all causes of action in the Complaint;
• Award Mr. Larsen (Mr. Garlinghouse) his attorney fees and all other costs reasonably incurred in defense of this action; and
• Award Mr. Larsen (Mr. Garlinghouse) any other relief as the Court may deem “just and proper.”

Empower Oversight Gives Ripple’s Defense a Boost

For Ripple, there was some positive news going into the weekend. Empower Oversight successfully forced the SEC to release emails related to the Ripple lawsuit.

The emails insinuate that William Hinman continued to hold meetings with Simpson Thacher. These meetings took place despite warnings from the SEC ethics team.

In December, Empower Oversight filed a lawsuit against the SEC, claiming that former SEC officials were biased against Ripple Lab and XRP. Empower Oversight alleged that former SEC official William Hinman received millions of dollars from his former employer while helping guide the SEC’s regulation of cryptocurrencies.

His former employer, Simpson Thacher, is part of a group that promotes Enterprise Ethereum. The lawsuit claims that Hinman said that Ethereum (ETH) wasn’t a security, causing an ETH price spike that preceded the Ripple Lab lawsuit, which led to the slide in the value of XRP.

On Friday, Empower Oversight tweeted the emails.

Key emails here. https://t.co/3Fju6ahgFX pic.twitter.com/67S6N5AcpL

— Jason Foster (@JsnFostr) April 8, 2022

Empower Oversight also tweeted,

“The documents show that the SEC ethics office cautioned former SEC official William Hinman that he had a direct financial interest in Simpson Thacher, yet Hinman continued to meet with the firm despite these warnings.”

The documents show that the SEC ethics office cautioned former SEC official William Hinman that he had a direct financial interest in Simpson Thacher, yet Hinman continued to meet with the firm in spite of these warnings.

— Empower Oversight (@EMPOWR_us) April 8, 2022

For Ripple Lab and Defendants Garlinghouse and Larsen, the Empower Oversight victory couldn’t have come at a better time. With legal experts seeing the emails as damming to the SEC case, the markets will be looking for SEC chatter and whether the SEC requests extensions to present any additional discovery requirements ahead of the Joint Proposed Scheduling Order, due on April 22, 2022.

XRP has shown little interest in the latest news despite the Empower Oversight victory.

XRP Price Action

At the time of writing, XRP was down by 2.37% to $0.7366. A bearish start to the day saw XRP slide to an early morning low of $0.7327.

XRP fell through the First Major Support Level at $0.7472 and the Second Major Support Level at $0.7400.

Technical Indicators

XRP will need to move through the Major Support Levels and $0.7602 pivot to make a move through the First Major Resistance Level at $0.7674.

Broader market sentiment would need to improve to support a move through to $0.75.

In the event of an extended rally, XRP should test the Second Major Resistance Level at $0.7804. The Third Major Resistance Level sits at $0.8006.

Failure to move through the Major Support Levels and the pivot would bring the Third Major Support Level at $0.7198 into play. Barring an extended sell-off throughout the day, XRP should avoid sub-$0.70.

The EMAs and the 4-hourly candlestick chart (below) send a bearish signal. Following Sunday’s session and this morning’s sell-off, XRP currently sits below the 50-day EMA at $0.7847. This morning, the 50-day EMA pulled back from the 200-day EMA. The 100-day EMA closed in on the 200-day EMA, a bearish signal.

A bearish cross of the 100-day EMA through the 200-day EMA would bring sub-$0.73 into play.