XRP Price Pressure Builds as Investors Await a Court Ruling and Powell

Key Insights:

• On Wednesday, XRP bounced back from the Tuesday sell-off, rising by 4.67% to end the day at $0.33661.
• A sharp pickup in appetite for riskier assets stemming from falling US Treasury yields delivered support.
• However, technical indicators remain bearish. XRP currently sits below the 100-day EMA, supporting a return to sub-$0.30.

On Wednesday, XRP rallied by 4.67%. Reversing a 3.41% loss from Tuesday, XRP ended the day at $0.33661.

A bearish morning saw XRP slide to an early low of $0.31255. Avoiding the First Major Support Level (S1) at $0.3121, XRP rallied to a late high of $0.33885. XRP broke through the First Major Resistance Level (R1) at $0.3369 before ending the day at $0.33661.

XRP found support despite a lack of updates from the ongoing SEC v Ripple case. The lack of progress left XRP in the hands of the broader crypto market.

Riskier Assets Ignore Hawkish Fed Chatter Ahead of Powell Speech

Following the better-than-expected ISM Non-Manufacturing PMI on Tuesday, the market focus returned to the Fed. However, the markets brushed aside hawkish FOMC member chatter through the US session. Falling US Treasury yields supported the demand for riskier assets.

Mid-week, crypto investors took their cues from the NASDAQ 100, which rallied by 2.14%. However, Fed fear remains a threat, with XRP sitting well below the $0.40 handle.

With the Fed unlikely to waver from its current monetary policy mantra, XRP will need favorable Court rulings to support a return to $0.40. The Court decision on the William Hinman speech-related documents remains the focal point.

In late July, the SEC filed an objection to a Court ruling denying the SEC motion to shield the Hinman speech-related documents under the attorney-client privilege. A decision on the SEC objection could come at any time.

By way of background, the former SEC Director of the Division of Corporation Finance, William Hinman, is a central figure in the SEC v Ripple case. In a famous 2018 speech, Hinman said that Bitcoin (BTC) and Ethereum (ETH) are not securities.

The outcome of the case will not just define the outlook for XRP but also the broader crypto market. Gensler continues to view most cryptos as securities despite being unable to prove the case with XRP since filing the lawsuit in December 2020.

XRP Price Action

At the time of writing, XRP was down 1.15% to $0.33274. A mixed start to the day saw XRP strike an early high of $0.33740 before falling to a low of $0.33112.

Technical Indicators

XRP needs to avoid the $0.3293 pivot to target the First Major Resistance Level (R1) at $0.3461.

A pickup in appetite for riskier assets would support a breakout from the Wednesday high of $0.33885. However, Fed Chair Powell will need to adjust his monetary policy stance or talk of softer inflation to support a return to $0.34.

In the case of an extended crypto rally, XRP would likely test the Second Major Resistance Level (R2) at $0.3556. The Third Major Resistance Level (R3) sits at $0.3819.

A fall through the pivot would give the bears a run at the First Major Support Level (S1) at $0.3198. Barring another extended sell-off, XRP should avoid sub-$0.30. The Second Major Support Level (S2) at $0.3030 should limit the downside.

The Third Major Support Level (S3) sits at $0.2767.

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

At the time of writing, XRP sat below the 100-day EMA, currently at $0.33505. The 100-day EMA flattened on the 200-day EMA, with the 50-day EMA narrowing to the 100-day EMA. The price signals were mixed.

An XRP move through the 100-day EMA ($0.33505) would bring the 200-day EMA ($0.34328) and R1 ($0.3461) into play. Failure to move through the 100-day EMA could see XRP slide through the 50-day EMA ($0.33007) to bring the Major Support Levels into view.