XRP Price Cap in Place as the Courts Drag Out the Hinman Ruling

Key Insights:

• On Tuesday, XRP closed out the day in positive territory, despite a return to sub-$0.34 for a fifth consecutive session.
• It was another quiet day, with no updates from the SEC v Ripple case to influence. US economic indicators did deliver support, however.
• The technical indicators remain bearish. With XRP sitting below the 50-day EMA, sub-$0.30 remains in play.

On Tuesday, XRP rose by 0.84%. Reversing a 0.29% loss from Monday, XRP ended the day at $0.3470.

A bearish morning saw XRP fall through the First Major Support Level (S1) at $0.3354 to a mid-morning low of $0.3328.

Steering clear of Monday’s low of $0.3316 and sub-$0.33, XRP rose to a high of $0.34772 before easing back. XRP fell short of the First Major Resistance Level (R1) at $0.3489.

It was all quiet on the litigation front. There were no updates from the ongoing SEC v Ripple case to influence. The lack of updates left XRP in the hands of US economic indicators and the global financial markets.

Fed Fear Subsides as the US Services Sector Contracts at a Faster Pace

The lack of updates from the ongoing SEC v Ripple case left XRP investors to focus on the US economy. On Tuesday, US private sector PMI figures disappointed, with the private sector contracting at a more marked pace in August.

A sharper contraction across the services sector weighed, though the manufacturing sector expanded at a slower pace.

In August, the Services PMI fell from 47.3 to 44.1, versus a forecasted 49.2. Sub-50 reflects a sector contraction. With the services sector accounting for more than 70% of the US economy, the figures raised the threat of a US economic recession.

However, the weak numbers also raised the hope of a more dovish Fed that offset any downside from the disappointing numbers.

From an XRP perspective, while US economic indicators and Fed monetary policy remain influential, the SEC v Ripple case remains the key driver.

Investors are currently awaiting a Court ruling that could dictate the outcome of the case. The Court is considering an SEC objection to the July court ruling, denying the SEC motion to shield the Hinman docs under the attorney-client privilege.

The former SEC Director of the Division of Corporation Finance, William Hinman, sits at the center of both rulings. In a famous 2018 speech, Hinman said that Bitcoin (BTC) and Ethereum (ETH) are not securities.

XRP Price Action

At the time of writing, XRP was up 0.01% to $0.34703.

Technical Indicators

Avoiding the $0.3425 pivot would support a run at the First Major Resistance Level (R1) at $0.3522.

XRP will need broader market support to break out from the Tuesday high of $0.34772.

In the case of an extended crypto rally, XRP would likely test the Second Major Resistance Level (R2) at $0.3574 and resistance at $0.36.

The Third Major Resistance Level (R3) sits at $0.3723.

A fall through the pivot would bring the First Major Support Level (S1) at $0.3373 into play. Barring another broad-based crypto sell-off, XRP should avoid sub-$0.3300 and the Second Major Support Level (S2) at $0.3276.

The Third Major Support Level (S3) sits at $0.3127

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 $0.35127.

Following Monday’s bearish cross, the 100-day EMA fell back from the 200-day EMA, with the 50-day EMA sliding back from the 200-day EMA. The XRP price signals were bearish.

A further pullback of the 50-day EMA from the 200-day EMA would bring the Major Support Levels into play. However, an XRP move through the 50-day EMA ($0.35127) and R1 ($0.3522) would give the bulls a run R2 (0.3574) and the 100-day EMA ($0.35868).