XRP breaks below bearish pattern as Hinman’s conflict of interest might hurt SEC

NEW DELHI (CoinChapter.com) — XRP prices fell nearly 43% against the U.S. dollar from May 9’s high of $0.579 to reach an intraday low of $0.333 on Thursday. The price dump also resulted in XRP breaking below a bearish technical pattern called the descending triangle pattern.

In detail, a descending trendline connecting swing highs and a horizontal trendline joining swing lows form the pattern. The height of the triangle’s thickest section determines the price target in a descending triangle setup.

The pattern gives XRP a breakdown target nearly 60% below its current price levels at $0.155. Increased volumes would help confirm the breakout.

Meanwhile, XRP prices have been trending downwards since Sept last year. The token lost more than 28% in Apr and is already down by 35% in May. In addition, momentum oscillator MACD continues to be bearish for Ripple.

Negative bars on the MACD histogram are expanding, indicating the MACD line (difference between 12-day and 26-day EMA) is moving away from the MACD signal line (9-day EMA of MACD). Expanding negative bars indicate a strengthening bearishness of Monero’s price momentum.

The bearish cues might push Ripple prices to immediate support near $0.354, a price level XRP last touched on Feb 1, 2021. Additionally, a continued sell-off might push XRP prices to $0.32.

XRP’s RSI In Oversold Levels

Ripple’s RSI is currently oversold, with a value of 20.72 on the daily charts, with the RSI trendline moving further downwards. In detail, when the RSI goes below 30, an asset enters the oversold region. Traders usually consider an oversold RSI to indicate a bullish trend reversal on the cards.

Also Read: Ripple addresses move large chunks of XRP as the token price drops 15% in a week.

Additionally, XRP also broke below the lower trendline of the Bollinger Bands indicator.

Bollinger bands consist of a simple moving average (middle band) and an upper and lower band. The two bands are standard deviations from the middle band. Therefore, when an asset’s prices break below the lower bands, it denotes an oversold condition.

Investors relying on RSI and Bollinger bands to predict price bottoms might start a buying spree to profit from the dip. As a result, XRP prices might move to challenge immediate resistance near $0.4. If XRP moves and consolidates above immediate resistance, it might help push Ripple prices to $0.42.

Finally, a sustained uptrend might see XRP prices rise to $0.46 before corrections pull back prices.

Ripple v/s SEC: Did Hinman Have A Conflict Of Interest?

Non-profit corruption watchdog Empower Oversight claimed to have documents that suggest the Securities and Exchange Commission former Director of Corporate Finance William Hinman had a conflict of interest during his 2018 speech.

To recap, the former director stated in a speech that Ether (ETH) and its transactions are not securities. Early in Apr, Empower Oversight had shared certain documents that showed the SEC ethics office had warned Hinman of his direct financial interest in his former law firm, the Simpson Thacher & Bartlett.

Also Read: Ripple CTO slams Elon Musk for buying Twitter as Dogecoin surged by 30%.

The law firm is a member of the Enterprise Ethereum Alliance (EEA), which helps promote the Ethereum blockchain. As such, the documents could pose a major threat to the SEC’s case against Ripple.

The next hearing of the case is on Friday, in which Ripple will respond to the SEC’s brief in which it claims that attorney-client privileges protect the Hinman documents. A decision in Ripple’s favor on the Hinman motion would likely go a long way in securing Ripple’s victory in the ongoing legal battle.

At the time of writing, XRP was trading at $0.383, down 7.3% on the day.