XRP Price Target of $0.40 Hinged on FTX and Contagion Risk Sentiment

Key Insights:

• On Wednesday, XRP slid by 3.35% to end the day at $0.37546.
• There were no SEC v Ripple case updates, leaving XRP to react to news of Genesis suspending redemptions.
• The technical indicators are bearish, with XRP sitting below the 50-day EMA, signaling a return to sub-$0.35.

On Wednesday, XRP slid by 3.35%. Reversing a 3.07% gain from Tuesday, XRP ended the day at $0.37546. Notably, XRP ended the day at sub-$0.40 for the eighth consecutive session.

A mixed start to the day saw XRP rise to a mid-morning high of $0.39066. Coming up short of the First Major Resistance Level (R1) at $0.4018, XRP fell to a late afternoon low of $0.36152. XRP briefly fell through the First Major Support Level (S1) at $0.3709 before wrapping up the day at $0.37546.

Going into the Wednesday session, coverage of the FTX collapse continued to test market confidence. More details emerged throughout the day, raising the likelihood of draconian-style regulatory measures.

There were no SEC v Ripple case updates to distract XRP holders mid-week. Despite the Wednesday loss, investor optimism toward a favorable outcome remains positive.

Contagion News Overshadows Optimism Toward the SEC v Ripple Case

After a string of Amicus Brief filings on Tuesday, it was a quiet Wednesday session. A lack of SEC v Ripple case news left XRP in the hands of the crypto wires.

News of Genesis Trading suspending redemptions reignited contagion fears, sending XRP and the broader market into the red.

For XRP holders, the next Court date is November 30. Parties must file summary judgment reply briefs under temporary seal. The public will have access to redacted versions on December 5.

We expect the content to influence sentiment toward the SEC v Ripple case. However, the collapse of FTX and contagion should have no bearing.

XRP Price Action

At the time of writing, XRP was up 0.76% to $0.37833. A mixed start to the day saw XRP fall to an early low of $0.37244 before rising to a high of $0.37948.

Technical Indicators

XRP needs to avoid the $0.3759 pivot to target the First Major Resistance Level (R1) at $0.3902 and the Wednesday high of $0.39066. A return to $0.39 would signal a bullish session. However, contagion, the SEC v Ripple case, and US stats need consideration.

In the case of an extended rally, the bulls would take a run at the Second Major Resistance Level (R2) at $0.4050. The Third Major Resistance Level (R3) sits at $0.4342.

A fall through the pivot would bring the First Major Support Level (S2) at $0.3611 into play. However, barring another extended sell-off, XRP should avoid sub-$0.35 and the Second Major Support Level (S2) at $0.3467. The Third Major Support Level (S3) sits at $0.3176.

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 $0.38300. The 50-day EMA slipped back from the 100-day EMA, with the 100-day EMA easing back from the 200-day EMA. The signals were bearish.

A move through the 50-day EMA ($0.38300) would support a breakout from R1 ($0.3902) to bring $0.40 and R2 ($0.4050) into play. However, failure to move through the 50-day EMA ($0.38300) would leave S1 ($0.3611) in view. The 200-day EMA sits at $0.42624.