XRP, the cryptocurrency that underpins Ripple’s global blockchain-based payments system, was last trading lower by just over 1% on Friday, having pulled back from weekly highs in the $0.3950 area to trade around the $0.3900 level. That still leaves the cryptocurrency higher by about 4.2% versus earlier weekly lows.
Recent US PPI data showed that, while the YoY rate of inflation declined further, the decline was not as large as expected, which has weighed on sentiment in cryptocurrency markets. As a result, XRP price predictions have not become more bullish.
XRP’s rally in the last few days from recent lows doesn’t signal a sudden resurgence in XRP risk appetite. The cryptocurrency has only been able to recover back to close to its 21 and 200-Day Moving Averages again and remains well within recent ranges. XRP has also failed to get back to the north of a key Fibonacci level that marks the 61.8% retracement back from September highs in the $0.56 area to June’s annual lows in the $0.28 area.
In the last few weeks, XRP appears to have formed a descending triangle pattern, with support keeping a floor under the price action in the low $0.37s, while the upside has been squeezed by a downtrend that began on the 25th of November. Descending triangles tend to form ahead of a bearish breakout. The XRP bears will thus be biding their time and waiting patiently for XRP to break lower once again towards sub-$0.35 levels.
XRP appears to be at a crossroads. It looks to be around the middle of both short ($0.37-42) and longer-term ($0.31-55) ranges. The $0.42 area is a formidable area of resistance – it has consistently acted as both resistance and support since late July and is where the 100 and 50DMAs reside.
Conversely, if next week’s US CPI data surprises to the upside like today’s PPI data, and should the Fed be interpreted by the market as sounding hawkish, then macro headwinds are likely to result in XRP grinding lower. A steady crawl lower to $0.31 support, which is roughly where the post-FTX collapse lows are, could be on the cards.
XRP might well remain stuck within recent ranges until things become clearer as to how the Ripple vs US SEC case is going to shake out next year.
Crypto analyst and influencer Miles Deutscher announced to his more than 250,000 followers on Twitter on Friday that, while he is not a fan of XRP, he hopes that “for the sake of our industry” they win in their case against the SEC. “If they don’t, there will likely be massive ramifications,” he added, though not going into any more detail about what those ramifications might be.
“Anyone hoping they lose is against crypto,” he added. Analysts suspect that an SEC victory over Ripple would send a chill across crypto innovation in the US and, likely, globally.
The SEC has accused Ripple of selling unregistered securities (its XRP tokens) to investors. However, an SEC failure in the ongoing lawsuit, which could conclude as early as Q1 2023, would be a “massive trigger to the upside for the whole crypto market,” one Twitter user opined.
Other crypto analysts have expressed a similar sentiment to Deutscher. “You don’t have to be a fan of Ripple or $XRP, but you should be rooting for them to win their case against the SEC,” tweeted David Gokhshtein to his more than 700,000 followers. “It would bring clarity to the #crypto industry… (and) would also keep innovation in the US,” he added.
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