Ripple Technical Analysis: XRP Again Crashes After Failing At 20-day SMA

Daily Ripple XRP Price Analysis

3 Min Read
Last Updated July 23rd 2021
  • Ripple price volatility is decreasing in the daily chart.
  • XRP in the 4-hour chart on the verge of getting oversold.
  • Since May 22, the Ripple price has been trending in a narrow $0.27 channel between $1.04 and $0.78. On June 4, XRP encountered resistance at the 20-day SMA and crashed from $1.04 to $0.86. Over the last four days, Ripple has encountered resistance twice at the 20-day SMA.

    Ripple Price Volatility Going Down

    The Ripple price has been crashing over the last five days and heading towards the $0.80 support wall. The Relative Strength Index (RSI) is hovering next to the oversold zone, so a further drop is possible before XRP gets oversold. The Bollinger Band has started constricting, which indicates that price volatility has been decreasing.

    Image: XRP/USD daily

    XRP/USD daily 060921

    In the 4-hour time frame, the Ripple price failed at the 50-bar SMA and dropped from $0.96 to the $0.80 support wall. During this crash, XRP also flipped the 20-bar SMA from support to resistance. Ripple was on the verge of charting a buy signal in the form of a red-nine candlestick but the latest candle has stopped it from happening.

    Image: XRP/USD 4-hour

    XRP/USD 4-hour chart 060921

    Ripple CEO Replies Sees Eye To Eye With Former SEC Chairman?

    Many people believe that Jay Clayton, former SEC Chairman, initiated the ongoing SEC-Ripple lawsuit before leaving the office. During his administration, the SEC denied several Bitcoin ETF proposals. Clayton was known for his anti-crypto stance. After his departure, he started to work for One River Digital Asset Management as part of its Academic and Regulatory Advisory Council. 

    In a recent editorial article for the Wall Street Journal titled “Crypto Needs Regulation, but It Doesn’t Need New Rules”, Clayton advocated for more regulation to the crypto market under the present framework. He called crypto part of a “digital revolution underway in the financial services industry."

    Clayton argued that the US regulators have decades of experience with financial activities performed by cryptocurrencies, such as payments. Therefore, he added that the regulators already have the tools to address the potential risks of this new asset class without “stifling their promise”. He said:

    If a coordinated analysis by national and international authorities reveals a regulatory gap, it should be filled. But we shouldn’t begin by assuming a need to reinvent the regulatory regime.

    As an example, the former SEC Chair cited the “bearer bonds”, an instrument used by holders to demand cash payments upon its presentation. Clayton noted that a coordinated effort between the US and international agencies “brought this market to a close” without affecting the overall bond market. He added:

    The same approach can be applied to new instruments that present similar risks, such as transferring bitcoin using an anonymous wallet. 

    Ripple CEO Brad Garlinghouse replied to Clayton on Twitter. He referred to the article as “definitely ironic” but lauded the change in the former government official’s view on the crypto industry.

    My main takeaway from this? Jay Clayton is joining the chorus of voices saying there is & has been a lack of regulatory clarity for crypto and that stifles innovation here in the US (definitely ironic, but better late than never!)

    Garlinghouse emphasized that technology can be useful for many purposes, legal and illegal. However, he believes compliant companies in the US have been left in “limbo” or are facing legal actions. Thus, he called for a clear legal and regulatory framework.

    Ripple Price Is Expected To Reach These Levels

    The Ripple price will likely drop to the $0.80 support wall. If this support barrier breaks, XRP will crash to the 200-day SMA ($0.71).

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