XRP Steadies but Uncertainty Over the SEC v Ripple Case Lingers

Key Insights:

• On Friday, XRP joined the broader crypto market in the deep red, sliding by 7.07%.
• Crypto exchange liquidity and recession fears sent XRP to sub-$0.35 for the first time since November 21.
• The technical indicators are bearish, with XRP sitting below the 50-day EMA, supporting a return to $0.30.

On Friday, XRP slid by 7.07%. Following a 1.92% loss on Thursday, XRP ended the day at $0.35158. XRP visited sub-$0.35 for the first time since November 21 while ending the day at sub-$0.36 for the first time since November 13.

A bullish start to the day saw XRP rise to a mid-morning high of $0.39500. XRP broke through the First Major Resistance Level (R1) at $0.3933 before sliding to a final-hour low of $0.34443. XRP fell through the day’s Major Support Levels to end the session at $0.35158.

Despite a return to $0.35, XRP failed to move back through the Third Major Support Level (S3) at $0.3548.

Exchange Liquidity and Recession Fears Catch Investors Off-Guard

Following the Thursday reversal in response to economic indicators from China and the US, Friday stats from the US added to the bearish sentiment towards the economic outlook.

US private sector PMI numbers showed a more marked economic contraction at the end of Q4. The numbers followed the hawkish Fed interest rate hike and disappointing retail sales figures.

However, ahead of Friday’s US PMI numbers, news of accounting firm Mazars Group suspending crypto-related services shook investor confidence.

There were no material updates from the ongoing SEC v Ripple case to distract investors from the US economic calendar and crypto news wires.

Investors await a Court ruling on the Summary Judgment Reply briefs while looking ahead to December 22, the next Court date. On December 22, parties must file omnibus motions to seal all materials relating to the summary judgment motions and proposed redactions to such materials.

With investors wary of the increased lawmaker and regulatory scrutiny ahead of the Court ruling, XRP will likely struggle to recoup Friday’s losses. Fears of another exchange liquidity crunch will also be a factor throughout the session.

XRP Price Action

At the time of writing, XRP was up 0.33% to $0.35273. A mixed start to the day saw XRP fall to an early low of $0.34992 before rising to a high of $0.35629.

Technical Indicators

XRP needs to move through the $0.3586 pivot to target the First Major Resistance Level (R1) at $0.3728 and the Friday high of $0.37989. A return to $0.3650 would signal a bullish session.

In the case of an extended rally, the bulls would take a run at $0.38 but fall short of the Second Major Resistance Level (R2) at $0.3941. The Third Major Resistance Level (R3) sits at $0.4296.

Failure to move through the pivot would give the bears a run at the First Major Support Level (S1) at $0.3374. However, barring another extended sell-off, XRP should avoid sub-$0.33 and the Second Major Support Level (S2) at $0.3232. The Third Major Support Level (S3) sits at $0.2877.

Barring updates from the SEC v Ripple case and a crypto exchange event, XRP will likely sit in the hands of the crypto exchange liquidity updates.

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 $0.37897. The 50-day EMA slid back from the 100-day EMA, with the 100-day EMA falling back from the 200-day EMA. The signals were bearish.

A move through R1 ($0.3728) would support a run at the 50-day ($0.37897) and 100-day ($0.38357) EMAs to bring R2 ($0.3941) into view. However, failure to move through the 50-day EMA ($0.37897) would leave XRP under pressure.