Ripple’s XRP took a break from its prevailing downtrend as its price rebounded from $0.68 to $0.72 in the last three days.
Ripple scores vs. SEC
Traders returned to buying XRP after a U.S. court denied the U.S. Securities and Exchange Commission’s (SEC) request to shield internal documents related to June 2018 speech made by its former director William Hinman, wherein he said Bitcoin (BTC) and Ether (ETH) are not securities.
To recap, SEC filed a lawsuit against Ripple, a San Francisco payment services company, in 2020, alleging that it and its executives Brad Garlinghouse and Christian Larsen conducted illegal securities sales via XRP tokens.
But Hinman’s treatment of similar cryptocurrencies as utility tokens prompted Ripple’s legal team to argue that the SEC has bias toward XRP by treating it as a security token.
Overall, the legal battle has limited XRP’s upside to date. For instance, it remains the only top cryptocurrency that couldn’t break its all-time high of over $3 in 2018.
XRP/USD weekly price chart. Source: TradingView
But with Ripple scoring some wins against the SEC, analysts are hopeful that it would bring a sustainable buying momentum back to XRP’s market.
I hope Ripple, and if they do then yes it will pump
– Lark Davis (@TheCryptoLark) April 4, 2022
More downside for XRP price?
The latest XRP price rebound comes when it is already breaking out of a classic bearish pattern.
In detail, XRP consolidated inside an ascending triangle between Dec. 28, 2021, and April 4, 2022.
Ascending Triangles are considered continuation patterns, for they resolve after the price breaks out in the direction of its previous trend. XRP broke out of its ascending triangle pattern to the downside on April 5, as shown in the chart below.
XRP/USD daily price chart featuring ‘ascending channel’ setup. Source: TradingView
As a rule, ascending triangle breakout targets come to be at length equal to the maximum distance between the structure’s upper and lower trendline when measured from the breakout point. In XRP’s case, the breakout point is near $0.82 while its triangle’s maximum height is around $0.32.
This puts the bearish target for XPR at near $0.50, which would be a new 2022 low.
Related: Digital currencies could get a boost from the international crisis: BlackRock CEO
Conversely, if XRP/USD stays above $0.69 as interim support, a rebound to the 50-day simple moving average (50-day SMA; blue wave in the chart above) near $0.78 in April is possible. Furthermore, a test of the 200-day EMA (orange wave) around $0.88 in Q2 would then be the next goal for the bulls.
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