The price of Ripple (XRP) was swinging between profit and loss on September 19 despite hopes that Ripple would eventually win its long-running legal battle with the United States Securities and Exchange Commission (SEC).
Ripple and the SEC both agreed to expedite the trial on Friday to get an answer on whether $XRP is a security or not.
—Jeff Sekinger (@JeffSekinger) September 19, 2022
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XRP/USD fell more than 1% to $0.35 while forming extremely sharp bullish and bearish wicks on its September 19 daily candlestick. In other words, its intraday performance hints at a growing bias conflict among traders.
The indecision could be due to XRP’s exposure to catalysts other than the SEC lawsuit against Ripple. Namely, the Federal Reserve potential to raise its benchmark interest rates by another 75 or 100 basis points at their September 20 policy meeting.
As Cointelegraph reported, fears of aggressive rate hikes drove the crypto market lower 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 parallel.
XRP price likely to break below $0.25 in Q4
Independent market analyst Cheds pointed out that XRP has been fluctuating inside a rectangular range since June, adding that “there is nothing exciting” at the moment.
The range is defined by $0.38 to $0.40 acting as resistance and $0.28 to $0.30 acting as support. XRP price fell after testing resistance and as of September 19 was heading towards the support zone as shown below.
Interestingly, a move towards rectangular range support could also trigger a classic bearish reversal pattern called the head and shoulders, defined by three consecutive peaks forming at the top of a common support level, with the middle peak (head) higher than the other two (left and right shoulders).
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A head and shoulders pattern resolves after price breaks below its support line and drops by as much as the maximum distance between the mean peak and support. Applying this theory to the daily chart of XRP presents $0.242 as a downside target.
In other words, the price of XRP could lose another 30% by the end of this year, mainly due to macro catalysts.
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