XRP Bears to Target Sub-$0.37 on SEC v Ripple Silence and Fed Fear

Key Insights:

• On Wednesday, XRP rose by 1.81% to end the day at $0.38349.
• There were no updates from the ongoing SEC v Ripple case to influence, leaving economic indicators from China to deliver a bullish session.
• However, the technical indicators remained bearish, signaling a return to sub-$0.36.

On Wednesday, XRP rose by 1.81%. Reversing a 0.53% loss from Tuesday, XRP ended the day at $0.38349. Significantly, XRP held onto the $0.38 handle for the first time in six sessions.

A bearish start to the day saw XRP fall to an early morning low of $0.3730. Steering clear of the First Major Support Level (S1) at $0.3717, XRP rose to a late session high of $0.38421. XRP broke through the First Major Resistance Level (R1) at $0.3820 to end the day at $0.38349.

XRP Revisits $0.38 on China Economic Indicators and Visa (V) News

There were no SEC v Ripple case updates to guide investors on Wednesday. The lack of updates left XRP in the hands of the global economic calendar and the crypto news wires.

On Wednesday, Visa (V) responded to a Reuters article about company intentions to pause its crypto plans over increased regulatory scrutiny following the collapse of FTX. The Visa Head of Crypto, Cuy Sheffield, reassured investors of the continued collaboration with crypto companies to support secure stablecoin payments.

However, the news of Silvergate Bank delaying its annual report was crypto market was bearish.

While the mixed crypto news influenced investor sentiment, economic data from China supported a breakout session. The all-important Caixin Manufacturing PMI rose from 49.2 to 51.6 versus a forecasted 50.2. Significantly, the manufacturing sector expanded for the first time since July 2022, driving demand for riskier assets.

The numbers were good enough to mute the influence of US economic indicators and the NASDAQ Composite Index. Hawkish Fed chatter and inflation numbers weighed on riskier assets in the afternoon session.

The ISM Manufacturing PMI continued to reflect a contraction across the manufacturing sector in February. However, sub-components supported the more hawkish sentiment toward Fed monetary policy. The ISM Manufacturing Prices Index jumped from 44.5 to 51.3.

The Day Ahead

Updates from the SEC v Ripple case remain key. Rulings related to the Hinman Documents would have a material impact on XRP price action. However, a lack of updates would leave XRP in the hands of the crypto news wires and the US economic calendar.

This afternoon, US initial jobless claims and unit labor costs will draw interest. A fall in jobless claims, a rise in unit labor costs, and hawkish Fed chatter would be bearish for the NASDAQ Composite Index and the broader crypto market.

Investors should continue monitoring Binance and FTX-related news, with SEC activity and US lawmaker chatter likely to remain the focal point.

Fed Fear and regulatory risk jitters are headwinds that will continue to peg XRP back from a sustainable breakout.

XRP Price Action

At the time of writing, XRP was down 0.98% to $0.37973. A mixed start to the day saw XRP rise to an early high of $0.38458 before falling to a low of $0.37973.

Technical Indicators

XRP needs to move through the $0.3802 pivot to target the First Major Resistance Level (R1) at $0.3875. A return to $0.3850 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 $0.3914 and resistance at $0.3950. The Third Major Resistance Level (R3) sits at $0.4027.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.3763 in play. However, barring an extended broad-based crypto sell-off, XRP should avoid sub-$0.3650. The Second Major Support Level (S2) at $0.3690 should limit the downside. The Third Major Support Level (S3) sits at $0.3578.

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 $0.38167. The 50-day EMA slipped back from the 200-day EMA, with the 100-day EMA pulling back from the 200-day EMA. The signals were bearish.

An XRP move through the 50-day EMA ($0.38167) would support a breakout from the 100-day EMA ($0.38503) and R1 ($0.3875) to bring R2 ($0.38914) into play. An XRP move through the 50-day EMA ($0.38167) would send a bullish signal. However, failure to move through the 50-day EMA ($0.38167) would leave the Major Support Levels in play.