XRP Bears to Target Sub-$0.46 on US Anti-Crypto Rhetoric

Key Insights:

• On Wednesday, XRP joined the broader crypto market in the red, falling 1.01% to end the day at $0.4709.
• Softer US inflation numbers failed to deliver a breakout as investors responded to US government and SEC-related news.
• The nearer-term technical indicators turned bearish, bringing sub-$0.45 into view.

On Wednesday, XRP fell by 1.01%. Following a 0.54% loss on Tuesday, XRP ended the day at $0.4709. Significantly, XRP fell short of the $0.48 handle for the fifth time in six sessions.

XRP Price Action

At the time of writing, XRP was up 0.11% to $0.4714. A range-bound start to the day saw XRP fall to an early low of $0.4708 before rising to a high of $0.4720.

Daily Chart

The Daily Chart showed XRP/USD sitting below the 50-day EMA ($0.4813) while holding above the 200-day EMA ($0.4580), sending near-term bearish but bullish longer-term signals.

Notably, the 50-day EMA narrowed to the 200-day EMA and reflected bearish momentum over the near term.

Despite the bearish Wednesday session, XRP/USD avoided the upper level of the $0.4675 – $0.4615 support band to keep the 50-day EMA ($0.4813) in view. A move through the 50-day EMA would give the bulls a run at the lower level of the $0.4925 – $0.5000 resistance band.

However, failure to move through the 50-day EMA would leave the $0.4675 – $0.4615 support band and the 200-day EMA ($0.4580) in view.

Looking at the 14-Daily RSI, the 45.18 reading signaled a bearish trend, aligned with the 50-day EMA and supporting a fall through the $0.4675 – $0.4615 support band to test the 200-day EMA ($0.4580).

4-Hourly Chart

Looking at the 4-Hourly Chart, the XRP/USD faces strong resistance at the $0.4750 psychological level. XRP/USD sits below the 50-day ($0.4737) and 200-day ($0.4812) EMAs, sending bearish signals over the near and longer-term time horizons. Significantly, the 50-day EMA pulled back from the 200-day EMA, supporting a fall through the upper level of the $0.4675 – $0.4615 support band.

However, an XRP move through the 50-day EMA ($0.4737) would bring the 200-day EMA ($0.4812) and the $0.4925 – $0.5000 resistance band into play.

The 14-4H RSI reading of 47.34 indicates a bearish trend and aligns with the 50-day EMA, with selling pressure outweighing buying pressure. Significantly, the RSI signals near-term bearish momentum, supporting a fall through the $0.4675 – $0.4615 support band.

SEC Gary Gensler Comments Weighed on Investor Sentiment

It was a quiet Wednesday session, with no Court rulings from the ongoing SEC v Ripple case to influence. The lack of Court rulings continued to leave XPP in the hands of the crypto news wires.

SEC Chair Gary Gensler weighed on investor sentiment with comments about the crypto space and the lack of regulatory oversight. Gensler also reacted to calls to recuse himself from the crypto industry after sweeping statements, classifying all cryptos (except BTC) as securities, saying,

“I take an oath, along with my fellow commissioners, to enforce the law that Congress passed and how the courts interpret it. It really comes down to protecting the investing public and looking through the facts and the circumstances of each of the individual tokens and the platforms themselves.”

The SEC Chair also discussed the lack of risk management to address wash trading but did not comment on the latest BTC ETF applications. However, the comments were negative enough to cast doubt on the SEC approving one, some, or all of the BTC ETF applications.

News of US lawmakers introducing a new crypto bill to deliver a regulatory framework failed to impress.

On Wednesday, Senator Cynthia Lummis announced the bill, saying,

“Today, Senator Gillibrand and I are reintroducing landmark legislation to create a federal regulatory framework that allows crypto business and investors to prosper here in America while protecting consumers from bad actors.”

The Lummis-Gillibrand Responsible Financial Innovation Act of 2023 Fact Sheet outlined the framework. Highlights included,

• Place crypto assets within the regulatory perimeter – Recognizes that crypto assets are here to stay.
• Securities and Commodities – Upholds the Howey test governing the presence of an investment contract.
• Fully regulates crypto asset exchanges – Requires crypto-asset exchanges to register with the Commodity Futures Trading Commission (CFTC).
• Combats the use of crypto assets for illicit finance – Establishes an interagency law enforcement working group.

The Day Ahead

It is a busy Thursday session. The US Producer Price Index Report and US jobless claims will be in focus. However, the crypto news wires will remain the key driver. Investors will continue to consider the US regulatory space and the ongoing SEC v Ripple case.

Investors should continue to monitor SEC and US lawmaker chatter. Binance, SEC v Binance, and Coinbase (COIN)-related news also needs consideration.