Ripple Technical Analysis: XRP Finds Healthy Support At 50-day and 20-day SMAs

Last Updated July 23rd 2021
4 Min Read

Daily Ripple XRP Price Analysis
  • Ripple price has gotten repeatedly rejected at the $0.50 over the last few days.
  • The market sentiment in the 4-hour chart seems to be negative.

The Ripple price has picked up from $0.42 to $0.47 over the last ten days. As things stand, XRP has failed to reach the $0.50 psychological line multiple times. So, what's going on behind the scenes? Let’s take a closer look.

Ripple Price Sits On Top Of 20-day SMA

Over the last three days, the Ripple price has managed to flip the 20-day SMA from resistance to support. This has been pretty crucial for XRP since this Thursday, the 20-day SMA had prevented the Ripple price from dropping any further.

xrp/usd daily chart 031121

Image: XRP/USD daily

The Ripple price in the 4-hour chart shows us that the parabolic SAR has flipped from bullish to bearish. This tells us that the overall market sentiment is negative. Over the last four sessions, the XRP is sandwiched between the 20-bar and 50-bar SMAs.

xrp/usd 4-hour chart 031121

Image: XRP/USD 4-hour

CPA Australia Is Still Bullish On Ripple And XRP

CPA Australia, a major accounting organization, recently released a report titled “Central Bank Digital Currencies (CBDCs): A Comparative Review.” The report reviews the three most-transacted digital currencies – Bitcoin, Ether and XRP. 

The report first defined central bank digital currencies (CBDCs) as “similar to cash” and commercial bank deposits, adding that a CBDC would be denominated in the sovereign currency and convertible at par with other forms of money. 

With regard to Bitcoin, the report said that the asset’s price has been subject to “spectacular volatility” in recent years, which has resulted in a lack of confidence in Bitcoin as a medium of exchange or as a store of value. The volatility has also raised concerns among central banks as to the viability of BTC as CBDCs.  

As for Ether, CPA Australia noted that a crucial differentiating feature of Ether (compared to BTC) is that it allows for the operation of smart contracts, and therefore programmable money and payments. 

Lastly, commenting on XRP, the report stated that Ripple and XRP “enjoy the trust of many banks as a model for CBDCs.” This is because it is highly centralized and is based on a permissioned network where only certain network nodes can validate transactions, the report noted. Ripple also allows the creation of new currencies and Ripple developers can decide the timing and quantity of supply in a similar way to current central bank operations, the authors mentioned. 

Interestingly, the report also mentioned that the French Central Bank has openly discussed Ripple/XRP as a possible platform for Europe’s central digital currency.

SEC: Ripple's Defenses Are "Legally Improper"

The US Securities and Exchange Commission (SEC) recently sent a letter to Judge Analisa Torres of the US District Court for the Southern District of New York. The SEC requested the court to strike Ripple's “fair notice” defenses and deny its executives’ forthcoming motions to dismiss the lawsuit.

SEC attorney Jorge Tenreiro argued that Ripple is trying to “avoid liability” for its unregistered XRP offering by blaming the Commission. This comes after Ripple stated that the SEC failed to provide fair notice that its sales could be illegal and cited a “lack of due process” in its response to the first amended lawsuit. Ripple also alleged that the agency had meetings with exchanges and didn’t warn them about XRP’s regulatory status.

To this, the SEC said that Ripple’s defenses are “legally improper,” adding that it has no legal obligation to warn industry participants about such violations. It said: 

Rather than acknowledge its own obligation to follow the law, Ripple instead posits that the SEC staff has an obligation to affirmatively warn industry participants about violations of other participants—even if the staff is in the process of conducting a non-public investigation—a requirement that does not exist in our legal system.

The regulator added that the Ripple case is a “straightforward application” of the Howey Test, a test created by the US to determine whether certain transactions can be qualified as securities. The SEC went on to add that Ripple has “capitalized” its business on selling its “digital asset security.” 

While the Financial Crimes Enforcement Network (FinCEN) called XRP “a virtual currency,” the SEC says that the term merely distinguishes it from traditional currencies. 

Notably, Ripple does not allege in its Amended Answer that anyone—the government, a legal advisor, or otherwise—told Ripple that a settlement with FinCEN meant Ripple was exempt from compliance with the securities laws, or any other applicable law, as Ripple's argument implies.

Ripple Price Is Expected To Reach These Levels

The Ripple price will probably keep trending horizontally below the $0.50 level.