XRP Bears to Target Sub-$0.33 After Brief Relief on Friday

Key Insights:

• On Friday, XRP rose by 0.81% to end the day at $0.34495.
• Investor jitters over the SEC v Ripple case took a pause after two heavy losses.
• However, the technical indicators are bearish, with XRP sitting below the 50-day EMA, signaling a return to sub-$0.30.

On Friday, XRP rose by 0.81%. Partially reversing a 3.86% slide from Thursday, XRP ended the day at $0.34495. Significantly, XRP visited sub-$0.34 for the second consecutive session.

A bearish start to the day saw XRP fall to a mid-morning low of $0.33365. Steering clear of the First Major Support Level (S1) at $0.3333, XRP rose to a late high of $0.3456. However, coming up short of the First Major Resistance Level (R1) at $0.3543, XRP eased back to end the day at sub-$0.3450.

There were no material updates from the ongoing SEC v Ripple case to move the dial.

Dip Buyers Deliver XRP Support After Two Successive Losses

The lack of material updates from the SEC v Ripple case left investors cautious. As 2022 ends, investors await two Court rulings that could decide the outcome of the SEC v Ripple case and materially impact the broader crypto market.

One pivotal ruling relates to the William Hinman 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.

However, since the Merge, SEC Chair Gary Gensler has suggested that ETH is a security.

The second Court ruling on the Summary Judgment Reply briefs could bring the SEC v Ripple case to a rapid conclusion. While investors are quietly optimistic about a favorable outcome, the uncertainty has led XRP back to sub-$0.35 levels.

This week, Amicus curiae attorney John Deaton held a poll on Twitter asking the crypto community whether the case settles or goes to verdict. 59.2% saw the SEC settling, while 40.8% believed the case would go to a verdict. While titling in favor of a settlement, the poll reflected the uncertainty that led XRP back from the $0.40 handle.

While rulings could come at any time, the next date on the Court schedule is January 4. Any non-parties must file a Motion to Seal any Summary Judgment Materials.

Today, investors should continue to monitor updates from the SEC v Ripple case. A lack of updates will leave XRP under pressure. Any upside would likely be limited. Fed and recession fears and regulatory risk will likely continue to influence over the near term.

XRP Price Action

At the time of writing, XRP was down 0.54% to $0.34310. A bearish start to the day saw XRP fall from an early high of $0.34481 to a low of $0.34310.

Technical Indicators

XRP needs to avoid the $0.3414 pivot to target the First Major Resistance Level (R1) at $0.3492. A move through the Friday high of $0.3456 would signal a bullish session.

In the case of an extended rally, the Second Major Resistance Level (R2) at $0.3534 would likely come into play. The Third Major Resistance Level (R3) sits at $0.3653.

A fall through the pivot would bring the First Major Support Level (S1) at $0.3372 into play. However, barring an extended sell-off, XRP should avoid sub-$0.3250. The Second Major Support Level (S2) at $0.3272 should limit the downside. The Third Major Support Level (S3) sits at $0.3175.

Court rulings on the SEC v Ripple case would remove the influence of the Support and Resistance levels.

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 $0.35058. The 50-day EMA fell back from the 100-day EMA, with the 100-day EMA sliding back from the 200-day EMA. The signals were bearish.

A move through R1 ($0.3492) and the 50-day EMA ($0.35058) would support a breakout from R2 ($0.3534) to target the 100-day EMA ($0.35623). However, failure to move through the 50-day EMA ($0.35058) would leave XRP under selling pressure.