XRP Risks Sub-$0.40 on SEC v Ripple Silence and Sticky US Inflation

Key Insights:

• On Tuesday, XRP extended the losing streak to four sessions, falling by 0.05% to end the day at $0.42903.
• SEC v Ripple silence and investor angst toward the US CPI Report left XRP in negative territory.
• The technical indicators are bearish, signaling a return to $0.40.

On Tuesday, XRP slipped by 0.05%. Following a 4.45% loss on Monday, XRP ended the day at $0.42903. Significantly, XRP ended the session at sub-$0.43 for the second time since March 24 and extended the losing streak to four sessions.

It was a bearish morning, with XRP falling to a late morning low of $0.42087. Steering clear of the First Major Support Level (S1) at $0.4090, XRP rose to a final-hour high of $0.43051. However, falling short of the First Major Resistance Level (R1) at $0.4505, XRP fell back to end the day at sub-$0.43 and in the red.

SEC v Ripple Silence and US Inflation Angst Weighed

It was yet another quiet session on Tuesday. There were no SEC v Ripple case updates to influence. The lack of progress in the ongoing SEC v Ripple case left investors on the sidelines. The XRP Community expects a Court ruling that could redefine the US crypto regulatory landscape.

However, optimism has turned to anxiety, with XRP facing the threat of a return to sub-$0.40.

While there were no updates from the Courts, Ripple CEO Brad Garlinghouse was back in the limelight. On Tuesday, venture capitalist Jason Calacanis had this to say about Ripple and XRP,

“It would have cost little for the Ripple team to have registered it as a security and played by the rules – like everyone else in the industry does all day long.”

Brad Garlinghouse responded to the tweet, saying,

“Remind me when you learned securities law?! This is embarrassing for you (and hilariously wrong as there is no framework to register digital assets in the US), but we’re all used to you making controversial statements and trolling about things you know nothing about…”

The response reflected the significance of the SEC v Ripple case to Ripple and the US crypto market. Away from the digital asset space, Fed commentary contributed to the bearish session.

FOMC Vice Chair John Williams had this to say on monetary policy,

“First of all, we haven’t said we’re done raising rates. We’re going to make sure we’re going to achieve our goals, and we’re going to assess what’s happening in our economy and make the decision based on that data.”

Williams also said he did not have an interest rate cut in his baseline forecast and could hike rates if required.

The Day Ahead

Investors should continue to monitor the crypto news wires and Twitter for Court rulings from the ongoing SEC v Ripple case. Judge Torres could deliver a decision from the SEC v Ripple case as early as today. A lack of SEC v Ripple case updates will likely continue to test buyer appetite.

Binance and Coinbase (COIN)-related news and the SEC will continue to draw interest.

This afternoon, US economic indicators will move the dial. The US CPI Report is in focus.

Hotter-than-expected inflation numbers would fuel bets of a 25-basis point June interest rate hike. Significantly, the markets would delay expectations of an interest rate cut and consider a hard landing. Economists forecast the US core annual inflation rate to soften from 5.6% to 5.5% and for the headline inflation rate to hold steady at 5.0%.

However, while the CPI Report will influence, we expect SEC v Ripple Court rulings to have more impact.

XRP Price Action

At the time of writing, XRP was down 0.13% to $0.42847. A mixed start to the day saw XRP rise to an early high of $0.43042 before falling to a low of $0.42778.

Technical Indicators

Resistance & Support Levels

XRP needs to avoid the $0.4268 pivot to target the First Major Resistance Level (R1) at $0.4327. A move through the Tuesday high of $0.43051 would signal a bullish session. However, SEC v Ripple chatter and the US CPI Report must support a breakout session.

In the case of an extended rally, XRP would likely test the Second Major Resistance Level (R2) at $0.4364 and resistance at $0.44. The Third Major Resistance Level (R3) sits at $0.4461.

A fall through the pivot would bring the First Major Support Level (S1) at $0.4231 into play. However, barring another crypto event or US CPI-fueled sell-off, XRP should avoid sub-$0.41. The Second Major Support Level (S2) at $0.4172 should limit the downside. The Third Major Support Level (S3) sits at $0.4075.

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

At the time of writing, XRP sat below the 50-day EMA, currently at $0.44859. The 50-day EMA slid back from the 200-day EMA, with the 100-day EMA pulling back from the 200-day EMA. The EMAs delivered bearish signals.

A move through R1 ($0.4327) would give the bulls a run at R2 ($0.4364) and $0.44. However, failure to move through R1 ($0.4327) would leave S1 ($0.4231) and sub-$0.42 Major Support Levels in view. A move through the 50-day EMA ($0.44859) would send a bullish signal.