XRP Bears Target a Return to Sub-$0.300 as SEC v Jitters Spike

Key Insights:

• On Sunday, XRP slipped by 0.01% to end the day at $0.33852.
• Investor jitters over the ongoing SEC v Ripple case continued to test buyer appetite at the start of the year.
• The technical indicators are bearish, with XRP sitting below the 50-day EMA, signaling a return to sub-$0.30.

On Sunday, XRP slipped by 0.01%. Following a 0.81% gain from Saturday, XRP ended the day at $0.33522. Significantly, XRP ended the day at sub-$0.34 for the second consecutive session.

A bearish start to the day saw XRP fall to an early morning low of $0.33522. XRP fell through the First Major Support Level (S1) at $0.3365 before rising to a late high of $0.33975. However, coming up short of the First Major Resistance Level (R1) at $0.3427, XRP eased back to end the day at sub-$0.3390.

There were no material updates from the ongoing SEC v Ripple case to move the dial.

Dip Buyers Delivered Support Amidst a Jittery Backdrop

The lack of updates from the SEC v Ripple case left investors cautious at the start of 2023. Investors await two Court rulings that will have a material price impact and may also decide the outcome of the SEC v Ripple case.

One pivotal ruling relates to the William Hinman speech-related documents. The SEC is attempting to shield selected content from the public. Following more than six failed attempts at preventing the documents from becoming public, the latest move could be a last-ditch effort before considering a settlement.

As background, former SEC Director of the Division of Corporation Finance William Hinman said that Bitcoin (BTC) and Ethereum (ETH) are not securities. The contentious issue with the speech related to Hinman’s connection with Simpson Thacher, which is part of a group that promotes Enterprise Ethereum. After leaving the SEC, Hinman returned to Simpson Thacher.

The second Court ruling on the Summary Judgment Reply briefs could bring the SEC v Ripple case to a rapid conclusion.

Investor optimism has turned to caution, with the latest increase in regulatory chatter in the wake of the FTX collapse leading XRP toward sub-$0.300.

Last week, Amicus curiae attorney John Deaton held a poll on Twitter asking the crypto community whether the case settles or goes to trial. 59.2% saw the SEC settling, while 40.8% believed a verdict would decide the outcome.

While rulings could come at any time, the next date on the Court schedule is January 4. Any non-parties must file a Motion to Seal any Summary Judgment Materials.

Today, investors should continue to monitor updates from the SEC v Ripple case. A lack of updates will leave XRP under pressure. A growing list of crypto market headwinds continues to test buyer appetite at current levels.

XRP Price Action

At the time of writing, XRP was down 3.40% to $0.32700. A bearish start to the day saw XRP slide from an early high of $0.33917 through the Major Support Levels to a low of $0.30098 before returning to $0.32700.

Technical Indicators

XRP would have to move through the Major Support Levels and the $0.3378 pivot to target the First Major Resistance Level (R1) at $0.3404. A return to $0.3350 would signal a bullish afternoon session.

In the case of an extended rally, the Second Major Resistance Level (R2) at $0.3424 would likely come into play. The Third Major Resistance Level (R3) sits at $0.3469.

Failure to move through the Major Support Levels and the pivot would leave sub-$0.300 in view.

Court rulings on the SEC v Ripple case would remove the influence of the Support and Resistance levels.

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 $0.34513. The 50-day EMA slid back from the 100-day EMA, with the 100-day EMA pulling back from the 200-day EMA. The signals were bearish.

A move through R1 ($0.3404) would give the bulls a run at R2 ($0.3424) and the 50-day EMA ($0.34513). However, failure to move through the 50-day EMA ($0.34513) would leave XRP under selling pressure.