• XRP price closes with a bullish hammer candlestick pattern, but selling resumes.
  • Daily Relative Strength Index (RSI) has still not reached an oversold reading.
  • SEC contends that the government had no duty to warn Ripple that XRP was a security.

XRP price follows the overall cryptocurrency market lower today, with the price reaching $1.02 before it rebounded slightly. The short-term outlook for the cross-border remittances token is clouded by renewed legal volatility and technical wrangling.

XRP price will not hear catastrophic voices until $0.80 support fails

The much-followed Securities and Exchange Commission (SEC) against Ripple took another turn yesterday as the regulatory agency introduced a new legal filing. The filing seeks to have the court dismiss Ripple’s defense that there “was a lack of due process and fair notice,” arguing that the government had no legal duty to advise Ripple that XRP was a security.

According to the SEC, the Ripple argument that the SEC was legally obligated to warn Ripple does not find support in the Due Process Clause.

Ripple’s contention that the SEC must warn a market participant about its legal violation, or that the SEC must issue regulations or guidance before the SEC can exercise the authority Congress conferred on the SEC to enforce the securities statutes, finds no support in the Due Process Clause or any other principle of law.

The discovery phase of the SEC vs. Ripple lawsuit, a time when both sides fight over what information they need to share with the other side, will be marked by further gamesmanship, putting market speculators in the crosshairs of a potential legal hurricane.

Despite a bullish hammer candlestick pattern yesterday, market participants have not seized on the opportunity, choosing instead to push price lower as Ripple almost touched the psychologically important $1 earlier today.

It is important to recall that the $0.80 is critical to a long-term bullish view; a failure to hold would reintroduce the token to the oscillations of the price range associated with the right shoulder of the multi-year head-and-shoulders bottom pattern that triggered back on April 5.

For now, the bias is tilted to the downside until the hammer high at $1.20 is conquered. The 61.8% Fibonacci retracement of the April advance offers some support at the moment, but odds favor a test of yesterday’s low at $0.87. The 50-day simple moving average (SMA) at $0.84 is an additional target on further weakness.

XRP/USD daily chart

XRP/USD daily chart

The path for Ripple is more complicated than some of the other cryptocurrencies at the moment due to the legal overhang. Still, the hammer high at $1.20 is fundamental to a bullish narrative followed closely by the declining trend line at $1.25. The price range determines the fate of Ripple.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed

Latest Crypto News

Latest Crypto News & Analysis

Editors’ Picks

XRP constricts before breaking out to $1

XRP showed strong signs of recovery after the shock of this past Saturday’s flash crash wore off. The past three days of congestion after a strong rally from the lows may begin a new uptrend for XRP.

More Ripple News

Ethereum in a pennant, with bullish breakout as tailwinds reemerge

Ethereum (ETH) price has formed a pennant that quit rapidly after the big sell-off during the weekend. Between $4,646 and $4,060, the price ranges from lower highs and higher lows. 

More Ethereum News

Bitcoin needs support to hold, so that bulls can reclaim $50,000

BTC saw bulls attempting to pair back a significant piece of the occurred losses from last Saturday. But bulls have hit a curb after reclaiming $50,000, as price action fades below and tests the first real support for further downside. 

More Bitcoin News

Cardano price in phenomenal buying zone as ADA targets $3

A brief technical and on-chain analysis on Cardano price. Here, FXStreet's analysts evaluate different patterns and indicators that suggest ADA is primed to advance further.

More Cardano News

The bull and the bear case for BTC

Bitcoin price saw a recent bullish impulse that faced massive headwinds before it tagged a crucial psychological barrier. With directional bias and choppy price action, BTC is likely to experience massive volatility as the situation resolves over time. 

Read full analysis