Source: PaxForex Premium Analytics Portal, Technical Insight
Following a favorable court ruling in July, expectations were high that XRP would experience a significant surge in value. After more than two years of anticipation for a positive resolution to the Securities and Exchange Commission's case, many cryptocurrency investors were convinced that XRP would effortlessly surpass the $1 mark this year.
However, XRP, formerly known as Ripple, has reversed much of its recent upward momentum. In the last 30 days, its value has plummeted by 25%, now trading around $0.54. The question now is: What lies ahead for XRP? Below, we outline both a bear and bull case scenario for XRP.
The notion of XRP as a short-term momentum play needs to be reconsidered. Those investors who jumped on the optimism generated by the SEC court ruling and acquired XRP in July and August are now nursing losses. While signs indicate a general improvement in sentiment toward XRP, the journey to reach $1 appears to be considerably more challenging than initially envisioned. XRP did experience a surge in mid-July, but it's now almost exactly where it began at the start of summer.
The prolonged SEC court case undeniably deflated XRP's prospects. As of December 2020, when the SEC initiated its case, XRP held a leading position in the crypto payments sector. Its foundational technology, the Ripple payment network for cross-border transactions, was arguably top-tier. This technology facilitated cost-effective, swift, and streamlined cross-border financial dealings. Additionally, XRP was in the process of forging partnerships with crucial financial service entities that recognized the transformative potential of blockchain-based payments for the future of the payments industry.
However, since 2020, a slew of blockchain competitors has emerged, boasting even speedier and more economical transaction capabilities than XRP. Furthermore, certain initial partners of XRP, such as MoneyGram International, opted to sever ties, possibly due to the legal repercussions of the SEC case. This shift has rendered XRP more exposed than ever to fresh competition. Complicating matters further, the SEC has announced intentions to appeal the July court verdict. Consequently, XRP might not yet be free from the uncertainties of regulatory risks.
Nonetheless, the Ripple network underlying XRP indisputably offers practicality as a facilitator of payments. Despite shedding certain financial service partners, XRP continues to secure new collaborations. Notably, Western Union recently expressed its interest in potentially integrating XRP into its existing payment infrastructure. By harnessing XRP's blockchain technology, a novel Western Union initiative could revolutionize international money transfers, rendering them more convenient, swift, and cost-effective.
Furthermore, XRP stands to benefit from prevailing macro trends unfolding in the realm of international payments, including de-dollarization and the advent of central bank digital currencies (CBDCs). If XRP can successfully integrate into various de-dollarization and CBDC initiatives spanning the globe, it stands to substantially enhance its long-term growth potential.
For instance, the BRICS coalition (comprising Brazil, Russia, India, China, and South Africa) has been vocal about developing a digital payment system enabling rapid cross-border transactions between member nations, circumventing the need for the US dollar. XRP's core blockchain technology aligns seamlessly with such an envisioned system. Consequently, a subset of enthusiasts is already touting the possibility of XRP surpassing its historical peak of $3.84.
Barring an exceptionally unforeseen development, my projection for XRP is to assume a niche role within the financial services sector, primarily focusing on cross-border remittances. Undoubtedly, digital remittances offer a potential $135 billion market, yet opting for a safer investment avenue like Western Union might be preferable, bypassing the risks and fluctuations inherent to the crypto space. After all, several emerging market ventures that could incorporate XRP in the future still appear speculative.
XRP remains under the radar of many, but some are hesitant to endorse it as a viable long-term investment at this juncture. In our assessment, XRP faces an arduous uphill trajectory, while numerous other altcoins priced below $1 exhibit more promising growth prospects for the long haul.
.GBP/CHF,D1
As long as the price is above 0.4500, follow the recommendations below:
- Time frame: D1
- Recommendation: long position
- Entry point: 0.5001
- Take Profit 1: 0.6000
- Take Profit 2: 0.7000
Alternative scenario:
If the level of 0.4500 is broken-down, follow the recommendations below:
- Time frame: D1
- Recommendation: short position
- Entry point: 0.4500
- Take profit 1: 0.4000
- Take profit 2: 0.3500
