XRP/USD: THE MARKET IS UNDER PRESSURE FROM MONETARY AND REGULATORY FACTORS

Current trend

The XRP/USD pair is losing ground gained a week earlier, remaining around 0.5224. The XRP token, like most other leading digital assets, is under pressure from monetary and regulatory factors.

In April, unemployment in the US reached 3.9%, and employment slowed down to 175.0K, strengthening investors’ hopes for easing monetary policy by the US Fed in September and supporting the asset. Still, policymakers insist monetary policy adjustments will come later and perhaps not this year, and some, like Michelle Bowman, are conceding another increase in borrowing costs if inflation remains high.

The negative impact on the sector strengthened with new actions by the US Securities and Exchange Commission (SEC). On Monday, the regulator sent Robinhood a notice of completion of the investigation and a pending lawsuit against the company related to US securities law violation, so the issuer’s shares declined by 2.5%. In addition, SEC Chairman Gary Gensler, in an interview with CNBC, confirmed his negative stance on digital assets, saying that most of them are securities, and investors do not receive all the information they need about them.

The XRP coin itself is under pressure amid a lawsuit against Ripple filed several years ago. Officials could not prove that the token was a security, but for other violations, they are seeking to recover 2.0B dollars from the corporation or ban its further operation. Lawyers for the technology company call these claims unfounded, arguing that the fines should not exceed 10.0M dollars. According to experts, resolving it will take several months, during which the XRP/USD pair will decline.

Support and resistance

The trading instrument is moving within the medium-term downward channel: at the beginning of the week, the price reached its upper limit and turned down. If the support zone 0.5020–0.4883 (Fibonacci correction 23.6%, Murrey level [2/8]) is broken down, the decline can reach 0.4300 (area of annual lows) and 0.3906 (Murrey level [0/8]). If the bulls overcome the key level of 0.5859 (Murrey level [4/8], Fibonacci correction 50.0%), the quotes will leave the downward channel and grow to 0.6348 (Murrey level [5/8]), 0.6836 (Murrey level [6/8]), and 0.7324 (Murrey level [7/8]).

Technical indicators do not give a single signal: Bollinger Bands are horizontal, MACD is stable in the negative zone, and Stochastic is directed downwards.

Resistance levels: 0.5859, 0.6348, 0.6836, 0.7324.

Support levels: 0.4883, 0.4300, 0.3906.

Trading tips

Short positions may be opened below 0.4883, with the targets at 0.4300, 0.3906, and stop loss 0.5370. Implementation time: 5–7 days.

Long positions may be opened above 0.5859, with the targets at 0.6348, 0.6836, 0.7324, and stop loss 0.5550.