XRP Sideways Market Structure Extends – Can Shorts Turn Profitable?

XRP, like its peers, continues with a depressed market structure, stuck in a ranging channel with support at $0.62 and a sturdy resistance at $0.65. The cross-border money remittance token has since its July breakout to $0.93 lost 33% to trade at $0.63 on Tuesday.

Amid the doldrums in the crypto market, the XRP trading volume has been shrinking below the $1 billion level to $933 million at the time of writing. The cross-border payments token has also seen a significant slump in its market cap from $44 billion in early July to $33 billion.

XRP Considers Downward Sweep

The fifth-largest crypto sits below all the major applied moving averages, starting with the 50-day Exponential Moving Average (EMA) (red) at $0.6295. the 100-day EMA (blue) at $0.6401 and the 200-day EMA (purple) at $0.6439.

This market position shows that bulls are bearing increasing selling pressure, likely to culminate in losses below the immediate support at $0.62.

However, as the Bollinger bands narrow due to the shrinking liquidity, XRP gets closer to a breakout.

Bollinger bands can help traders anticipate the likely price drop in XRP by looking for a bearish divergence between the price and the bands. This would be of particular importance when the price makes a higher high, but the upper band makes a lower high, indicating that the upward momentum is weakening and that sellers are gaining strength.

Traders hoping to capitalize on the potential short positions could also look out for a breakout below the lower band (which is highly likely based on the current market structure), signaling that the price has moved out of its normal range and that a strong downtrend is likely to follow.

Selling XRP short means that traders are betting on the price sliding below the initial support at $0.62 and extending losses to $0.60 before bulls consider another significant trend reversal.

Conversely, this sideways trend in XRP could lead to a leg-up in the price, especially if bulls manage to push above the first short-term hurdle – highlighted by the 50-day EMA.

However, the uptrend targeting $0.7, $0.85, and $1 may take longer to materialize amidst the ongoing sideways action. The Moving Average Convergence Divergence (MACD) indicator validates the ranging movement in the same four-hour time frame.

XRP Transactions Will Not Be Securities Despite SEC Appeal

Outspoken crypto lawyer John Deaton has once again delved into the issue surrounding the partial ruling in the Ripple vs. Security and Exchange Commission (SEC) lawsuit which determined that XRP sales on third-party platforms like Binance and Coinbase are not securities while those made directly to institutions assume the security status.

While XRP and the crypto market priced in the ruling in July, the SEC is seeking to appeal the ruling in order to insist XRP be a security.

In this article it’s says:

“In short, most XRP transactions might still be securities transactions.”

This is NOT true and constitutes total FUD. Even if Judge Torres agrees to certify the interlocutory appeal and stay the case (HUGE ASSUMPTIONS, especially the stay), it would… https://t.co/o7VLWbszUo pic.twitter.com/5T0H57UC8A

— John E Deaton (@JohnEDeaton1) August 11, 2023

Deaton in his latest rundown of the case said that even if the court grants the regulator’s interlocutory appeal request, it would not mean that XRP transactions automatically become securities.

“That would assume just because the SEC claims it is, means it is. That’s not even close to being accurate,” Deaton said via X (Twitter).

It is expected that the SEC’s appeal will dwell on the programmatic sales of XRP on third-party platforms, which the agency says raises “controlling questions of law on which there is substantial ground for differences of opinion.”

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