XRP at Risk of Sub-$0.36 on Fed Jitters and Regulatory Scrutiny

Key Insights:

• On Monday, XRP bucked a bearish top-ten trend, rising by 0.20% to end the day at $0.37871.
• While a lack of SEC v Ripple case news left XRP relatively flat, lingering optimism toward the outcome provided support.
• However, the technical indicators remained bearish, signaling a return to sub-$0.36.

On Monday, XRP rose by 0.20%. Following a 0.02% gain on Sunday, XRP ended the day at $0.37871. XRP ended the day at sub-$0.38 for the fourth consecutive session.

A bearish morning saw XRP fall to a morning low of $0.37088. XRP fell through the First Major Support Level (S1) at $0.3751 and the Second Major Support Level (S2) at $0.3723. However, finding afternoon support, XRP rose to a final-hour high of $0.38000. Coming up against the First Major Resistance Level (R1) at $0.3807, XRP eased back to end the day at $0.37871.

Fed Fear and Regulatory Risk Jitters Left XRP Below the $0.38 Handle

There were no SEC v Ripple case updates to guide investors on Monday. The lack of updates left XRP in the hands of the broader crypto market.

Fed Fear and regulatory risk jitters weighed on investor sentiment at the start of the week. Market reaction to updates from the G20 on plans to introduce a global crypto regulatory framework tested buyer appetite.

SEC Chair Gary Gensler was back in the news, stating that all cryptos, except BTC, are unregistered securities. Ripple defense counsel Stuart Alderoty had this to say,

“Chair Gensler has again proclaimed that every cryptocurrency, except BTC, is an unregistered security. He now must recuse himself from voting on any enforcement case that raises that issue since he has prejudged the outcome. Antoniu v. SEC (8^th Cir. 1989).”

US economic indicators and the NASDAQ Composite Index provided brief relief. However, better-than-expected US core durable goods orders supported a more aggressive Fed interest rate trajectory to bring inflation to target, which was crypto market negative.

Binance news also tested investor resilience. On Monday, a Forbes report of Binance transferring $1.8 billion of user assets to hedge funds tested sentiment. At the time of writing, Binance CEO CZ had yet to respond to the report.

The Day Ahead

Updates from the SEC v Ripple case remain key. A lack of updates would leave XRP in the hands of the broader crypto market. Investors should continue monitoring Binance and FTX-related news that will draw interest.

However, we expect SEC activity and US lawmaker chatter to overshadow any positive crypto-related news.

In the afternoon session, US economic indicators and Fed chatter will also provide the NASDAQ Composite Index and the broader crypto market direction. US consumer confidence will be in the spotlight. A pickup in confidence would support the more hawkish Fed policy outlook.

XRP Price Action

At the time of writing, XRP was down 0.53% to $0.37671. A mixed start to the day saw XRP rise to an early high of $0.37907 before falling to a low of $0.37670.

Technical Indicators

XRP needs to avoid the $0.3765 pivot to target the First Major Resistance Level (R1) at $0.3822. A return to $0.38 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 $0.3857 and resistance at $0.39. The Third Major Resistance Level (R3) sits at $0.3948.

A fall through the pivot would bring the First Major Support Level (S1) at $0.3731 into play. However, barring an extended broad-based crypto sell-off, XRP should avoid sub-$0.3650. The Second Major Support Level (S2) at $0.3674 should limit the downside. The Third Major Support Level (S3) sits at $0.3583.

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 $0.38303. The 50-day EMA fell back from the 200-day EMA, with the 100-day EMA pulling back from the 200-day EMA. The signals were bearish.

An XRP breakout from R1 ($0.3822) and the 50-day EMA ($0.38303) would give the bulls a run at R2 ($0.3857) and the 100-day EMA ($0.38657). An XRP move through the 50-day EMA ($0.38303) would send a bullish signal. However, failure to move through the 50-day EMA ($0.38303) would leave the Major Support Levels in play.