XRP shows a declining price momentum that could lead to a steep correction. The directional bias will be determined by how the remittance token will react to the immediate support level.
SEC v Ripple Case Jitters Buyers
After a significant loss on Monday, XRP was under pressure on the morning of Tuesday, December 6, as investor anxiety about the SEC versus Ripple case jitters buyers.
No update has been provided about the ongoing SEC versus Ripple case to influence the price, which means XRP has been in the hands of the broader crypto market for the longest time. However, news of China easing COVID-19 restrictions under their Zero-Covid Program has delivered support.
The United States economic indicators and the Nasdaq Composite Index also continue to weigh on the crypto market. After the United States published stellar job numbers, the data indicated that the economy had added more than 280,000 jobs in November 2022, as the unemployment rate remained unchanged at 3.7%. Meanwhile, wages had gone up by 5%, pointing to the Fed likely to continue hiking rates in December.
Despite the influence of forces from the external market, investors remain anxious about the SEC versus Ripple case, adding further pressure to the XRP price. However, following the filing of the Summary Judgment Reply briefs, investors wait in anticipation as the court ruling is due at any time.
The absence of settlement chatter has also increased angst among investors as uncertainty regarding the outcome of the case increases. Accordingly, XRP price volatility is expected to increase over the short term as the next Court date is on December 22.
Amicus Curiae attorney John Deaton spoke about the SEC on Friday, revealing the regulator’s intentions and the possible impact on XRP and the broader cryptocurrency market. From his Twitter thread:
“6 months ago on Fox Business, I said that Gensler would sue a major exchange or two for selling unregistered securities. I believe it even more today because it could cause another 50% crash. Then incumbents take a larger share.”
Today, chatter around the SEC versus Ripple case continues to influence the market as the United States economic calendar remains on the lighter side. This leaves investors very attentive to developments in the ongoing case.
As investor anxiety increases, Deaton’s comments are likely to have contributed to the increased volatility.
Mixed Morning for XRP Price as it Sees Late Support at $0.3822
XRP price fell by almost 0.12% on Monday to close the day at $0.38942, reversing the 0.60% gain recorded on Sunday. This was the third consecutive session where XRP closed the day below $0.39, and with today’s price, the coin has fallen short of $0.40, but support is in sight.
An eventful morning has seen XRP price rise to a mid-morning high of $0.39500 on Tuesday, December 6. The crypto broke up the first significant resistance level at $0.3964 before correcting to a late low of $0.38100. Also, XRP briefly fell through the first critical support level at $0.3822 and the second primary resistance level at $0.4026. Investors should note that the $0.382 support level l was a crucial hurdle in June 2022 and continues to be highly significant. XRP could take off or succumb to a steep correction depending on how the remittance token reacts to this level.
XRP managed to resist going below the $0.38 level after it found late support to close the day at $0.38942. At the time of this writing, XRP was down 1.21% to $0.3848. A mixed start to the day saw XRP price rise to an early high of $0.39075, but it fell afterward to a $0.38465 low.
XRP/USD Daily Chart
XRP needs to move through the $0.3885 pivot for the price to target the first significant resistance level at $0.3964. A move through the morning high of $0.39075 would signal a bullish session. In the case of a prolonged rally, the bulls would take a run at the second primary resistance level at $0.4026, with the third significant resistance level sitting at $0.4164.
Failure to move through the pivot would leave the first primary support level at $0.3822. However, resisting an extended sell-off, XRP should avoid going below the $0.3750 mark and the second primary support level at $0.3749. The third significant support level is located at the $0.3591 mark.
Chatter regarding the redacted Summary Judgment Reply briefs dated Friday, December 2, will draw interest.
XRP price is below the 50-day EMA at $0.39170, easing back from the 100-day EMA. The 100-day EMA is withdrawing from the 200-day EMA at $0.40104. The exponential moving averages (EMAs) and the daily candlestick chart send a bearish signal.
A breakout from th4 50-day EMA and the 100-day EMA would support a move through the first significant resistance at $0.3964 to target the 200-day EMA and the second effective resistance at $0.4026. However, failure to move through the 50-day EMA would leave the first significant support at $0.322 in play.
The relative strength index (RSI) is moving below the midpoint and is showing 48. The declining RSI indicates that the XRP price momentum is waning as bears take the lead. However, the current XRP price slump could be a strategy by market makers to collect the sell-stop liquidity below $0.316.
Accordingly, investors should not be quick to jump the gun but instead stick to a directional bias. A short recovery rally above the support of $0.3822 followed by a liquidity run will hint at manipulation. In this case, market players can expect the XRP price to increase. The $0.446 and $0.506 levels are key barriers where holders can book profit, a move that would have constituted a 25% XRP price upswing.
On the other hand, if the remittance token produces a decisive daily candlestick close below the $0.382 support without any recovery attempts, it will support the bearish thesis currently in play. If this happens, Ripple could trigger a 25% crash to $0.288.
Ripple Labs v SEC Ruling to Come Soon
Analysts have opined that Ripple Labs has a strong case against the SEC. However, despite this perceived advantage, it is too early to determine whether Ripple’s argument will stand in court. In a statement, however, Ripple’s CEO Brad Garlinghouse said:
“I said it on day 1; we will aggressively fight to get clear rules for the entire industry in the U.S. Congrats to Team Ripple for getting us to this point. Ripple stood strong and withstood the SEC’s onslaught. I look forward to being on the right side of justice.”
With the case approaching its second anniversary, analysts support that the judge will deliver his ruling soon.
