XRP Recovers from Losses as the SEC Files for Another Extension

Key Insights:

• XRP trailed the broader crypto market with a 0.91% gain to end the day at $0.4081.
• Uncertainty to the outcome of the SEC v Ripple case continues to weigh, with the SEC showing little intent to wrap the case up this year.
• Key technical indicators bearish. XRP sits well below the 50-day EMA.

On Tuesday, XRP rose by 0.91%, the upside modest as a result of the ongoing SEC v Ripple case. Partially reversing a 4.06% slide from Monday, XRP ended the day at $0.4081.

XRP slid to an early afternoon low of $0.3903 to test support at $0.39 before recovering to $0.40.

While a late crypto market rebound delivered support, downside risks remain as investors continue to respond to news updates on the SEC case against Ripple. For XRP holders, it has become a game of attrition.

The SEC appears content in filing extensions. The SEC has also shown an unwillingness to move on from previous court rulings in relation to the William Hinman documents and claims of attorney-client privilege.

This suggests that a court ruling in favor of the Defendants will result in further extensions and more filings to sway the courts into a different finding.

SEC Files an Extension to Oppose Amici Curiae Counsel Letter

On Tuesday, the SEC filed a request to the Court to extend the SEC’s time to file an opposition to the letter filed by counsel for six amici curiae.

The SEC requested a deadline of June 7, highlighting that it ‘is the SEC’s first request for an extension of this deadline.’

John Deaton, counsel for the amici curiae, filed a letter dated May 21 requesting participation in a briefing relating to the expert challenge.

Deaton took to Twitter, saying,

“The SEC wants an “expert” witness to give testimony about what XRP holders were thinking when they bought XRP.”

Deaton added,

“Deaton represents 67k ACTUAL XRP HOLDERS and wants to present what they were ACTUALLY thinking.”

Defense attorney James Filan said,

“Amici request permission to file brief regarding SEC expert who claims to know motivation of XRP holders when purchasing XRP. Amici also seeks access to expert’s report and deposition testimony.”

John Deaton is marching into Court!

The SEC wants an "expert" witness to give testimony about what XRP holders were thinking when they bought XRP.

Deaton represents 67k ACTUAL XRP HOLDERS and wants to present what they were ACTUALLY thinking.

SO of course, the SEC opposes it. https://t.co/Xtz1g1TGBd pic.twitter.com/NgPHLt8b4t

— Jeremy Hogan (@attorneyjeremy1) May 22, 2022

 

As background, Judge Analisa Torres granted XRP holders amici curiae status in the ongoing SEC v Ripple case. The amici curiae status allows XRP holders and counsel to assist the court in legal matters relating to the lawsuit on a pre-approved basis.

The latest extension comes as the SEC and Ripple await a court ruling on the SEC brief claiming that William Hinman’s speech-related documents fall under the attorney-client privilege.

XRP Price Action

At the time of writing, XRP was down 0.12% to $0.4076.

Technical Indicators

XRP will need to avoid the $0.4038 pivot to target the First Major Resistance Level at $0.4173. XRP would need broader crypto market support to break out from Tuesday’s high of $0.4130.

In the event of an extended rally, XRP should test the Second Major Resistance Level at $0.4265 and resistance at $0.43. The Third Major Resistance Level sits at $0.4492.

A fall through the pivot at $0.4038 would bring the First Major Support Level at $0.3946 into play.

Barring another extended sell-off throughout the day, XRP should avoid sub-$0.3850. The Second Major Support Level sits at $0.3811.

The EMAs and the 4-hourly candlestick chart (below) send a bearish signal. At the time of writing, XRP sits below the 50-day EMA, currently at $0.4201. This morning, the 50-day EMA pulled back from the 100-day EMA. The 100-day EMA also fell back from the 200-day EMA, XRP negative.

A move through the 50-day EMA would support a return to $0.45. Near-term, the court ruling on the SEC’s claim that the Hinman speech-related documents fall under attorney-client privilege will be the key.