The XRP price fluctuated between gains and losses on September 19, despite hopes that Ripple would eventually win its long-running legal battle against the US Securities and Exchange Commission (SEC).
Ripple and the SEC both agreed to expedite the lawsuit on Friday to get an answer on whether: $XRP is a security or not.
— Jeff Sekinger (@Jeff Sekinger) September 19, 2022
Fed spoils SEC vs. Ripple Euphoria
The XRP/USD pair fell more than 1% to USD 0.35 as it formed extremely sharp bullish and bearish wicks on its September 19 daily candlestick. In other words, the intraday performance pointed to a growing bias conflict among traders.
The indecision may be due to XRP’s exposure to catalysts other than the SEC vs. Ripple lawsuit. Namely, the potential of the Federal Reserve to raise its benchmark interest rates by another 75 or 100 basis points during their policy meeting on September 20.
As TBEN reported, fears of aggressive rate hikes have strained the crypto market throughout the year, including Bitcoin (BTC) and Ether (ETH). XRP is also not immune, given the token’s consistently positive correlation with Bitcoin since October 2021.
For example, the daily correlation coefficient of XRP with Bitcoin on September 19 was 0.47. A reading of 1 means the two assets are moving in lockstep.
XRP price threatens to go below $0.25 in Q4
Independent market analyst Cheds emphasized that XRP has fluctuated within a rectangular range since June, adding that there is currently “nothing to get excited about.”
The range is defined by $0.38-$0.40 as resistance and $0.28-$0.30 as support. The price of XRP fell after resistance testing and was moving into support territory on September 19 as shown below.
Interestingly, a move towards the rectangular range support could also trigger a classic bearish reversal pattern called the head-and-shoulders, defined by three consecutive peaks that form atop a common support level, with the middle peak (head) higher than the other two (left and right shoulder).
Related: Ether Strike Could Cause Securities Laws – Gensler
A head-and-shoulders pattern resolves after the price moves below the support line and falls by as much as the maximum distance between the mid-peak and the support. Applying this theory to XRP’s daily chart yields $0.242 as a downward target.
In other words, XRP price could lose another 30% by the end of this year, mainly driven by macro catalysts.
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