XRP Bulls to Target $0.40 as SEC v Ripple Case Nears Its Conclusion

Key Insights:

  • On Sunday, XRP ended a seven-day losing streak, falling by 2.59% to end the day at $0.38483.
  • Bearish Sentiment from the broader crypto market weighed as investors await rulings from the SEC v Ripple case.
  • However, the technical indicators are bullish, with XRP sitting above the 50-day EMA, signaling a return to $0.45.

On Sunday, XRP fell by 2.59%. Reversing a 2.41% gain from Saturday, XRP ended the week up 11.70% to $0.38483. Despite the bearish session, XRP avoided sub-$0.37 for the second consecutive session.

A bearish morning saw XRP fall from an early high of $0.3961 to a mid-day low of $0.37997. However, steering clear of the First Major Support Level (S1) at $0.3781, XRP tested resistance at $0.39 before falling back to sub-$0.3850.

XRP Joins the Crypto Market in the Red as Investors Lock Profits

It was a quiet Sunday session, with no updates from the ongoing SEC v Ripple case to provide direction. While hopes of a favorable outcome to the case continue to deliver price support, the broader crypto market dragged XRP into the red on Sunday.

Investors locked in profits to end a seven-day winning streak. Despite the optimism, uncertainty about the outcome of the case remains, with several Court rulings pending. However, the Courts may hold back until the parties and non-parties file their final motions on January 18.

By Wednesday, all parties and non-parties must file oppositions to the non-party Motions to Seal.

Among the pending rulings is a decision on the SEC motion to redact content from the William Hinman speech-related documents. Another Court ruling against the SEC could force the SEC into 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.

Today, there are unlikely to be any updates from the SEC v Ripple case to influence, with the US on holiday. A lack of updates would leave XRP in the hands of the broader crypto market. After the Sunday pullback, an upward trend will likely continue as FTX contagion risk eases and Fed fear abates.

XRP Price Action

At the time of writing, XRP was up 1.57% to $0.39089. A bullish start to the day saw XRP rise from an early low of $0.38466 to a high of $0.39171.

XRPUSD 160123 Daily Chart

Technical Indicators

XRP needs to avoid a fall through the $0.3870 pivot to target the First Major Resistance Level (R1) at $0.3940 and the Sunday high of $0.3961. A return to $0.3950 would signal a bullish session. However, the broader crypto market would need to support a breakout.

In the case of an extended rally, XRP would likely test the Second Major Resistance Level (R2) at $0.4031. The Third Major Resistance Level (R3) sits at $0.4192.

A fall through the pivot would bring the First Major Support Level (S1) at $0.3778 into play. However, barring an extended sell-off, XRP should avoid sub-$0.37. The Second Major Support Level (S2) at $0.3708 should limit the downside. The Third Major Support Level (S3) sits at $0.3547.

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

XRPUSD 160123 Hourly Chart

The EMAs and the 4-hourly candlestick chart (below) sent a bullish signal.

At the time of writing, XRP sat above the 50-day EMA, currently at $0.37256. The 50-day EMA pulled away from the 200-day EMA, with the 100-day EMA crossing through the 200-day EMA. The signals were bullish.

A hold above the 50-day EMA ($0.37256) would support a breakout from R1 ($0.3940) to target R2 ($0.4031). However, a fall through S1 ($0.3961) would give the bears a run at the 50-day EMA ($0.37256) and S2 ($0.3708). A fall through the 50-day EMA would be a bearish signal.

XRPUSD 160123 4 Hourly Chart