XRP Bulls Need a Return to $0.40 or Face Sub-$0.37 on SEC Action

Key Insights:

• On Thursday, XRP joined the broader market in the red, sliding by 4.01% to end the day at $0.38165.
• While there were no updates from the SEC v Ripple case to influence, SEC regulation by enforcement sent XRP to sub-$0.38.
• The technical indicators turned bearish, with XRP sitting below the 100-day EMA, signaling a return to sub-$0.37.

On Thursday, XRP slid by 4.10%. Following a 1.44% loss on Wednesday, XRP ended the day at $0.38165. XRP visited sub-$0.38 for the first time since January 19.

After a range-bound morning, XRP rallied to an early afternoon high of $0.40861 before hitting reverse. XRP broke through the First Major Resistance Level (R1) at $0.4045 before sliding to a late low of $0.37294. XRP fell through the Major Support Levels before a late move through the Third Major Support Level (S3) at $0.3757 to end the day at $0.38165.

Crypto Regulatory Activity Sends XRP into the Deep Red

On Thursday, there were no updates from the ongoing SEC v Ripple case to influence investor sentiment. However, the lack of updates left XRP in the hands of the SEC.

News of Kraken settling with the SEC and ceasing US crypto staking services sent the broader crypto market into the deep red. With the SEC targeting staking services in its battle against crypto, other exchanges may also be feeling the heat. On Thursday, Coinbase (COIN) shares tumbled 14.13% to end the day at $59.63.

SEC Chairman Gary Gensler had this to say,

“Today the SEC charged Kraken for the unregistered offer & sale of securities thru its staking-as-a-service program. Whether it’s through staking-as-a-service, lending, or other means, crypto intermediaries must provide the proper disclosures & safeguards required by our laws.”

While XRP and the broader crypto market succumbed to the SEC’s regulation by enforcement, Ripple CEO Brad Garlinghouse shared a series of tweets discussing the progress of regulatory reforms in other jurisdictions.

Garlinghouse said,

“Stepping back for a moment from what’s happening in the US – just in the last few weeks, the number of positive (or at least headed in the direction of CLARITY) global regulatory developments is energizing!”

Highlighting the effects of proactive regulatory activity, Garlinghouse added,

“The list goes on (Brazil’s new legislative framework, etc.). Note the commonalities – these regulators are providing leadership and doing the work that we are desperately missing in the US – unsurprisingly, this is where companies like Ripple are growing!”

Today, investors should continue to monitor the crypto news wires for updates from the SEC v Ripple case, FTX, Genesis, and Silvergate Bank. Investors should also monitor SEC chatter, with crypto staking in the spotlight.

However, US economic indicators and Fed chatter will influence this afternoon. Michigan Consumer Sentiment figures will draw interest, with FOMC member Waller speaking late in the session.

XRP Price Action

At the time of writing, XRP was up 0.67% to $0.38422. A mixed start to the day saw XRP fall to an early low of $0.38109 before rising to a high of $0.38528.

Technical Indicators

XRP needs to move through the $0.3877 pivot to target the First Major Resistance Level (R1) at $0.4025 and the Thursday high of $0.40861. A return to $0.40 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 $0.4234 and resistance at $0.4250. The Third Major Resistance Level (R3) sits at $0.4591.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.3669 in play. However, barring another extended broad-based crypto sell-off, XRP should avoid sub-$0.36 levels and the Second Major Support Level (S2) at $0.3521. The Third Major Support Level (S3) sits at $0.3164.

The EMAs and the 4-hourly candlestick chart (below) sent a bearish signal.

At the time of writing, XRP sat below the 200-day EMA, currently at $0.39438. After Thursday’s bearish cross, the 50-day EMA pulled back from the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA. The signals were bearish.

A move through the 200-day EMA ($0.39438) would support a breakout from the 50-day ($0.39980) and 100-day ($0.40052) EMAs to target R1 ($0.4025). A move through the 50-day EMA would send a bullish signal. However, failure to move through the 200-day EMA ($0.39438) would leave S1 ($0.3669) in play.