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Ripple (XRP) appears to be recovering from its downward spiral into early trading on Wednesday, exhibiting a slight reversal in the bearish mood it has been in since the beginning of this month. At the time of writing, XRP/USD is trading around $0.85.
Yesterday, we told you about how the overall sentiment in the crypto market had soured due to former US President Donald Trump’s skeptical comments about Bitcoin likening it to a scam. This pushed XRP further away from the key $1 level, although it has managed to recoup some of its losses from earlier in the day when it had slipped to around $0.78.
Over the past week, Ripple’s XRP has lost nearly 15% of its value despite promising fundamental developments, related to the lawsuit as well as news about increased adoption of its technology. According to a new legal filing, Ripple has asked the court to pay no heed to a report that notes over 70 instances of the SEC taking action against crypto companies prior to going after Ripple on the issue of security status for XRP.
While this report by a private firm – Cornerstone Research, could potentially work against Ripple’s ‘due process and fair notice’ defense, a legal expert maintains optimism that the lawsuit could be settled between the two parties before it goes to trial. Such a settlement, if and when it happens, could potentially boost the value of XRP in the near-term and even send the crypto market into a supply shock, driving down the supply while demand remains unchanged.
Key Levels to Watch
On the H4 chart of XRP/USD, most of the moving averages are suggesting a continuation of the bearish mood; however, the momentum indicator points to a possible bullish tone building up. For now, the price is holding below a key support level of $0.89 and just above the next support level at $0.84. Its next move will offer more insight into a potential reversal or continuation of the downtrend.
In case buyers step in and take XRP back up above $0.89, they need to break past the pivot at $0.97 for a resurgence of the uptrend. On the other hand, if selling pressure continues to build up, we could see Ripple’s XRP going all the way back down to test $0.75 in the immediate future.
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