Key Insights:
- On Friday, XRP fell by 3.21% to record the third decline from seven sessions.
- Fed Chair Powell sent XRP and the broader crypto market into the red, with no updates from the SEC v Ripple case to distract investors.
- The technical indicators remain bearish. With XRP sitting below the 50-day EMA, an XRP return to sub-$0.30 remains in play.
On Friday, XRP fell by 3.21%. Reversing a 0.99% gain from Thursday, XRP ended the day at $0.33772.
Tracking the broader market, XRP broke through the day’s Major Resistance Levels to a pre-Powell speech high of $0.37000 before hitting reverse. The reversal saw XRP tumble to a low of $0.33302. XRP fell through the First Major Support Level (S1) at $0.3444 and the Second Major Support Level at $0.3398 to end the day at $0.33772.
There were no material updates from the ongoing SEC v Ripple case to provide direction. The lack of updates left XRP in the hands of US economic indicators and Fed Chair Powell.
Economic Indicators Overshadowed by Fed Chair Powell Warning
It was a busy Friday session, with US economic indicators providing XRP support before Fed Chair Powell turned the tables.
Investors reacted positively to softer inflation figures despite weak personal spending numbers. The Core PCE Price Index increased by 4.6% year-over-year in July, down from 4.8% in June. Personal spending increased by a modest 0.1% versus a 1.0% rise in June. Economists forecast a 0.4% increase.
While XRP returned to sub-$0.36 ahead of the US economic indicators, Fed Chair Powell sent XRP to the day low of $0.33302.
Fed Chair Powell delivered a warning to the markets of the Fed’s commitment to bring inflation to target. Powell talked of the likely fallout from the Fed’s goal, including the impact on labor market conditions. The Fed Chair also removed any hope of a policy reversal by highlighting the need for a period of sustained below-trend growth alongside a weaker labor market to tame inflation.
While the Fed was in the spotlight, a Court decision on the SEC objection vis-à-vis the Court denying the SEC motion to shield the Hinman speech-related documents under the attorney-client privilege remains the key consideration.
The former SEC Director of the Division of Corporation Finance, William Hinman, is a central figure in the SEC v Ripple case. In a famous 2018 speech, Hinman said that Bitcoin (BTC) and Ethereum (ETH) are not securities.
XRP Price Action
At the time of writing, XRP was down 1.11% to $0.33398.
A choppy start to the day saw XRP rise to an early high of $0.34498 before falling to a low of $0.33398.
Technical Indicators
An XRP move through the $0.3469 pivot would support a run at the First Major Resistance Level (R1) at $0.3608.
XRP will need broader market support for a breakout from $0.35.
In the case of an extended crypto rally, XRP would likely test resistance at the Friday high of $0.3700. However, XRP would likely fall short of the Second Major Resistance Level (R2) at $0.3839.
The Third Major Resistance Level (R3) sits at $0.4209. Following Fed Chair Powell’s speech, investor focus will likely return to the SEC v Ripple case.
Failure to move through the pivot would leave the First Major Support Level (S1) at $0.3238 in play. Barring another broad-based crypto sell-off, XRP should avoid sub-$0.32 and the Second Major Support Level (S2) at $0.3099.
The Third Major Support Level (S3) sits at $0.2730.
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 $0.34774.
Following Monday’s bearish cross, the 100-day EMA fell back from the 200-day EMA, with the 50-day EMA easing back from the 200-day EMA. The price signals were bearish.
A further pullback of the 50-day EMA from the 200-day EMA would bring the Major Support Levels into play. However, an XRP move through the 50-day EMA ($0.34774) would give the bulls a run at the 100-day EMA ($0.35440) and the 200-day EMA ($0.35828).