XRP Bears Target Sub-$0.42 as US Crypto Landscape Deteriorates

Key Insights:

• On Friday, XRP slid by 5.51% to end the session at sub-$0.45 for the first time since March 26.
• Fed Fear and US recession jitters weighed, with no updates from the SEC v Ripple case to influence.
• The technical indicators are bearish, signaling a return to sub-$0.42.

On Friday, XRP slid by 5.50%. Following a 3.33% loss on Thursday, XRP ended the day at $0.44940. Significantly, XRP wrapped up the session at sub-$0.45 for the first time since March 26.

A mixed start to the day saw XRP rise to an early high of $0.47916. Falling short of the First Major Resistance Level (R1) at $0.4950, XRP fell to a late low of $0.44036. XRP fell through the First Major Support Level (S1) at $0.4606 and briefly through the Second Major Support Level (S2) at $0.4456 before ending the day at $0.4494.

SEC v Ripple Silence Left Fed Fear and Recession Jitters to Influence

There were no SEC v Ripple case updates to influence investor sentiment on Friday. The silence left XRP on the back foot for the fourth session in five.

Fed Fear, US recession jitters, and US government scrutiny weighed on investor sentiment.

Investors appeared unable to shake the bearish sentiment that resulted from the UK and euro area inflation numbers. On Thursday, weak US manufacturing sector and labor market numbers added to the bearish mood, with several FOMC members calling for further interest rate hikes to tackle inflation.

US Flash private sector PMI numbers for April failed to turn the mood despite a sharp pickup in service sector activity.

US Secretary of the Treasury Janet Yellen put the crypto market in the spotlight, with financial stability the hot topic. The threat of supervision by the Federal Reserve was another bearish story for the session.

The Day Ahead

Investors should monitor the crypto news wires for updates from the ongoing SEC v Ripple case. Binance and Coinbase (COIN)-related news will also provide direction.

However, US lawmaker chatter and regulatory activity will remain a focal point.

XRP Price Action

At the time of writing, XRP was down 0.52% to $0.44707. A mixed start to the day saw XRP rise to an early high of $0.45210 before falling to a low of $0.44576.

Technical Indicators

Resistance & Support Levels

XRP needs to move through the $0.4563 pivot to target the First Major Resistance Level (R1) at $0.4723 and the Friday high of $0.47916. A return to $0.47 would signal a bullish session. However, SEC v Ripple chatter must support a breakout.

In the case of an extended rally, XRP would likely test the Second Major Resistance Level (R2) at $0.4951. The Third Major Resistance Level (R3) sits at $0.5339.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.4335 in play. However, barring another extended sell-off, XRP should avoid sub-$0.42 and the Second Major Support Level (S2) at $0.4175. The Third Major Support Level (S3) sits at $0.3787.

The EMAs and the 4-hourly candlestick chart (below) sent bearish signals.

At the time of writing, XRP sat below the 200-day EMA, currently at $0.48361. After the bearish cross, the 50-day EMA fell back from the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA. The EMAs delivered bearish signals.

A move through R1 ($0.4723) and the 200-day ($0.48361) would give the bulls a run at the 50-day EMA ($0.49508) and R2 ($0.49510). However, failure to move through the 200-day EMA ($0.48361) would leave S1 ($0.4335) in view. A move through the 50-day EMA would send a bullish signal.