XRP Bears Eye a First Visit to Sub-$0.36 Since January on G20 Updates

Key Insights:

• On Saturday, XRP joined the broader crypto in the red for a third session, falling by 0.13% to end the day at $0.37786.
• Updates from the G20 and further reaction to the US inflation numbers and hawkish Fed chatter overshadowed sentiment toward the SEC v Ripple case.
• The technical indicators remained bearish, signaling a return to sub-$0.36.

On Saturday, XRP slipped by 0.13%. Following a 2.57% loss on Friday, XRP ended the day at $0.37786. The bearish session left XRP short of the $0.38 handle for the second time since January 11.

A range-bound morning saw XRP rise to a mid-morning high of $0.37930 before hitting reverse. Coming up short of the First Major Resistance Level (R1) at $0.3884, XRP fell to a late low of $0.36944. XRP briefly fell through the First Major Support Level (S1) at $0.3705 before wrapping up the day at $0.37786.

G20 Updates and Fed Fear Leave XRP Short of $0.38

US economic indicators and Fed chatter from Friday refueled Fed fear, weighing on riskier assets. A pickup in US inflation raised expectations of a more aggressive Fed interest rate path to bring inflation to target. Significantly, the latest US stats put 50-basis point rate hikes back on the table.

Increasing regulatory activity and lawmaker commentary vis-à-vis cryptos continued to test buyer sentiment. On Saturday, the G20 put cryptocurrencies in the spotlight, calling for a comprehensive global regulatory framework. The IMF even called for the G20 to consider banning cryptos.

However, US Treasury Secretary Janet Yellen poured cold water on the idea of a crypto ban, saying,

“We haven’t suggested outright banning of crypto activities, but it is critical to put in place a strong regulatory framework. We’re working with other governments.”

Yellen’s comments provided some market comfort. A G20 agreement to ban cryptos would be catastrophic for the crypto market and innovation.

John Deaton Faces Zakinov v Ripple Test

There were no SEC v Ripple case updates for investors to consider. However, Amicus Curiae attorney John Deaton was in focus.

Defense attorney James Filan shared the latest from the Zakinov v Ripple case in California, saying,

“The California plaintiffs have filed a Brief in Opposition to John Deaton’s Motion to File an Amicus Brief in Zakinov v Ripple. John Deaton has officially taken up residence in the California attorneys’ heads.”

By way of background, the plaintiffs claim that Ripple sold XRP as an unregistered security and are asking the Court to certify a class of all XRP holders who purchased and now hold XRP or sold XRP at a loss.

The issue with the claim is that the proposed class would include 75,890 XRP holders who disagree with the small number of plaintiffs. Additionally, some XRP holders reside in countries that have already determined that XRP is not a security.

John Deaton had this to say about the Zakinov v Ripple case before filing the Amicus Brief in mid-February,

“I point out the class I have is 75,980 while he has 6. Regardless, I tell the judge his case should be limited to sales offered directly by Ripple and shouldn’t include secondary sales around the world, including in foreign lands where those regulators say XRP is not a security.”

While the case is unconnected to the SEC v Ripple case, a ruling for the Plaintiff would make things interesting.

The Day Ahead

Investors should monitor news updates relating to the SEC v Ripple case. Binance and FTX-related news will also draw interest.

However, we expect SEC activity and US lawmaker chatter to remain the key driver near term, barring a ruling from the Courts on the SEC v Ripple case.

With the markets preparing for the start of a new week, it could be another mixed session. Fed Fear and regulatory risk remain crypto headwinds to test buyer appetite.

In the final hour, the NASDAQ mini will provide direction as investors grapple with the Fear of the Fed.

XRP Price Action

At the time of writing, XRP was up 0.10% to $0.37825. A mixed start to the day saw XRP fall to an early low of $0.37685 before rising to a high of $0.37825.

Technical Indicators

XRP needs to avoid the $0.3755 pivot to target the First Major Resistance Level (R1) at $0.3816. 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 $0.3854 and resistance at $0.39. The Third Major Resistance Level (R3) sits at $0.3953.

A fall through the pivot would bring the First Major Support Level (S1) at $0.3718 into play. However, barring an extended broad-based crypto sell-off, XRP should avoid sub-$0.36. The Second Major Support Level (S2) at $0.3657 should limit the downside. The Third Major Support Level (S3) sits at $0.3558.

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 $0.38688. The 50-day EMA slid 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 ($0.3816) would give the bulls a run at R2 ($0.3854) and the 50-day EMA ($0.38688). An XRP move through the 50-day EMA ($0.38688) would send a bullish signal. However, failure to move through the 50-day EMA ($0.38688) would leave the Major Support Levels in play.