XRP Bulls to Target a Return to $0.45 on SEC v Ripple Optimism

Key Insights:

• On Wednesday, XRP tumbled by 9.87% to end the day at $0.42218.
• Fed monetary policy and renewed regulatory scrutiny left XRP in negative territory.
• However, the technical indicators remain bullish despite the pullback, signaling a return to $0.50.

On Wednesday, XRP tumbled by 9.87%. Partially reversing the 25.25% surge from Tuesday, XRP ended the day at $0.42218. Despite the pullback, XRP avoided sub-$0.40 for the first time since February 4.

A mixed start to the day saw XRP rise to a first-hour high of $0.47498 before hitting reverse. Falling short of the First Major Resistance Level (R1) at $0.5163, XRP slid to a late low of $0.40969. However, steering clear of the First Major Support Level (S1) at $0.3969, XRP revisited the $0.4265 handle before easing back.

Fed Chair Powell Delivers a Sharp Pullback on Inflation Commitment

There were no updates from the ongoing SEC v Ripple case to provide direction on Wednesday. The lack of updates left XRP in the hands of the Federal Reserve and Fed Chair Powell.

On Wednesday, the Fed raised interest rates by 25 basis points, aligned with market expectations. However, more hawkish FOMC Projections and Fed Chair Powell sent XRP and the broader crypto market to session lows.

While Powell discussed the possible implications of the banking crisis on monetary policy, the Fed Chair reiterated the commitment to bring inflation under control, sending XRP deep into the red.

The losses came despite rising hopes of a Ripple win against the SEC, with profit taking contributing to the more bearish session.

This week, Ripple filed a letter to Judge Torres to support their fair notice defense. The filing referenced rulings on SEC objections in the Voyager Digital Holdings bankruptcy case.

According to the filing, the SEC objected to Voyager’s plans to sell its assets, including VGX, to Binance.US. Additionally, the SEC objected to the involvement of Binance.US, with the SEC stating that Binance.US is an unregistered securities exchange. The filing to Judge Torres noted that the basis for Judge Wiles rejecting the SEC objections endorsed many of the arguments the Defendants have presented in the filing.

Regarding the regulatory landscape and the SEC’s attempts to block the sale of assets to Binance.US, the filing noted that,

“Judge Wiles found that cryptocurrency market participants operate in a regulatory environment that at best can be described as highly uncertain, in which regulators themselves cannot seem to agree as to whether cryptocurrencies are commodities that may be subject to regulation by the CFTC or whether they are securities that are subject to securities laws, or neither, or even on what criteria should be applied in making the decision.”

Judge Wiles went on to say,

“An uncertainty has persisted despite the fact that cryptocurrency exchanges have been around for a number of years.”

With regulators and US lawmakers intensifying scrutiny of the digital asset space, the rulings and comments about the regulatory environment could prove pivotal in the SEC case against Ripple and Ripple’s fair notice defense.

Recently appointed Ripple Labs President Monica Long shared the market optimism of a Ripple win.

The Day Ahead

Investors should monitor updates from the SEC v Ripple case. Rulings on the Hinman Documents and the Summary Judgment Reply Briefs could come at any moment.

However, a lack of news from the SEC v Ripple case would leave regulator and lawmaker chatter to influence, along with Binance and FTX-related news.

Overnight, news hit the wires of the SEC issuing a Wells Notice to Coinbase (COIN) while also targeting Justin Sun and celebrities for the sale of unregistered securities.

XRP Price Action

At the time of writing, XRP was up 0.89% to $0.42593. A mixed start to the day saw XRP fall to an early low of $0.41836 before rising to a high of $0.42593.

Technical Indicators

XRP needs to move through the $0.4356 pivot to target the First Major Resistance Level (R1) at $0.4615 and the Wednesday high of $0.47498. A return to $0.45 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 another extended rally, XRP would likely test the Second Major Resistance Level (R2) at $0.5009. The Third Major Resistance Level (R3) sits at $0.5662.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.3963 in play. However, barring an extended broad-based crypto sell-off, XRP should avoid sub-$0.39 and the Second Major Support Level (S2) at $0.3703. The Third Major Support Level (S3) sits at $0.3050.

The EMAs and the 4-hourly candlestick chart (below) sent bullish signals.

At the time of writing, XRP sat above the 50-day EMA, currently at $0.39887. The 50-day EMA pulled away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA. The EMAs delivered bullish signals.

A hold above the 50-day EMA ($0.39887) would support a breakout from R1 ($0.4615) to target R2 ($0.5009). However, a fall through the 50-day ($0.39887) and S1 ($0.3963) would bring the 100-day ($0.38862) and 200-day ($0.38491) EMAs into play. A fall through the 50-day EMA would send a bearish signal.