Key Insights:
- On Monday, XRP reversed losses from the day to end the day flat at $0.3794.
- There were no updates from the SEC v Ripple case to provide direction, leaving geopolitics and sentiment towards the US economy to influence.
- The technical indicators are bullish, with XRP sitting above the 50-day EMA.
On Monday, XRP rose by 0.03%. Following a 2.19% decline from Sunday, XRP ended the day at $0.3794.
A bullish start to the day saw XRP rise to an early high of $0.3858. Falling short of the First Major Resistance Level at $0.3926, XRP fell to a low of $0.3712.
Finding support at the First Major Support Level (S1) at $0.3722, XRP bounced back to end the day flat.
There were no news updates from the SEC v Ripple case to influence, leaving XRP in the hands of market risk sentiment. US recessionary fears resurfaced, pressuring the crypto market before the late recovery.
With US economic indicators testing buying demand, rising geopolitical tension between the US and China has added to the bearish mood.
Nancy Pelosi’s Anticipated Taiwan Visit Weighs on Riskier Assets
While Ripple makes progress in its defense against the SEC, geopolitics takes center stage at the start of the month.
House speaker, Nancy Pelosi, is due to visit Taiwan today. The visit is to go ahead despite stern warnings from Beijing that could see tensions rise to levels last seen early in the Trump term.
XRP and the broader crypto market have tracked the NASDAQ 100 Mini into the red, with investors now needing to look out for comments and reactions from Beijing.
While geopolitics is in the spotlight, the SEC v Ripple case remains the key driver. Investors await a court ruling on the SEC objection vis-à-vis the William Hinman speech-related documents.
The former SEC Director of the Division of Corporation Finance said that Bitcoin (BTC) and Ethereum (ETH) are not securities. Hinman delivered the speech in 2018. For almost a year, the SEC has tried to shield the documents under the attorney-client privilege. To date, SEC has yet to see a Hinman ruling in its favor.
XRP Price Action
At the time of writing, XRP was down 2.42% to $0.3702.
A choppy start to the day saw XRP rally to an early high of $0.3938 before falling to a low of $0.3667.
XRP broke through the First Major Resistance Level (R1) at $0.3864 before sliding through the First Major Support Level (S1) at $0.3718.
The Second Major Resistance Level (R2) at $0.3934 and resistance at $0.40 limited the early upside.
Technical Indicators
XRP needs to move through S1 and the $0.3788 pivot to retarget the First Major Resistance Level (R1) at $0.3864 and the Sunday high of $0.3988.
XRP would need support from the broader market to support a return to $0.38.
In the case of an extended crypto rally throughout the session, XRP could retest R2 and resistance at $0.40.
The Third Major Resistance Level sits at $0.4080.
Failure to move through S1 and the pivot would leave the Second Major Support Level (S2) at $0.3642 in play.
Barring an extended sell-off, XRP should avoid sub-$0.36 and the Third Major Support Level (S3) at $0.3496.
This morning, 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 $0.3695.
The 50-day EMA pulled away from the 100-day EMA. Following the 100-day EMA bullish cross through the 200-day EMA, the 100-day EMA widened the gap from the 200-day EMA, both XRP price positives.
A further widening of the 50-day EMA from the 100-day EMA would support a return to $0.38.
However, a fall through the 50-day would signal an extended sell-off and a likely test of S2.