Source: PaxForex Premium Analytics Portal, Fundamental Insight
Over one year ago, on December 22nd, 2020, the SEC filed its lawsuit against Ripple Labs Inc and two of its executives. The SEC claims Ripple raised $1.3 billion in an unregistered, ongoing digital assets securities offering, violating federal securities laws in the US. Last month, CEO and co-defendant Brad Garlinghouse stated good progress in its legal battle with the US regulator, and experts have rumored for months that Ripple could win the lawsuit. It would lift a headwind for price action of XRP, providing a significant fundamental boost.
The lawsuit could still result in a guilty verdict despite the positive turn of events for Ripple, and the outcome is impossible to predict. Traders must monitor the news flow but focus on the ongoing positive developments. Ripple signed an agreement last month to develop a digital currency strategy with Palau, extending its push for global adoption. While Bitcoin and Ethereum grab most headlines, the remaining eight projects in the Top 10 by market cap have the most real-world application, connections, and useable benefits. They connect the online and offline world, which is why asset managers are likely to increase their holdings at the expense of Bitcoin and Ethereum.
Brad Garlinghouse noted positive developments across its network. He predicted a 130% increase in the XRP-based On-Demand Liquidity (ODL) feature for the fourth quarter of 2021. Expansion into the UAE and Japan continues to provide growth for the XRP token. Other bullish factors traders should evaluate are the ongoing popularity of NFTs, further development of Defi, connecting billions to the global financial system, the potential of Web 3, modernizing the internet, and the emergence of the metaverse, where digital tokens are likely to play a significant role.
The forecast for the XRP/USD remains cautiously bullish, but traders should expect a rise in volatility. With the Tenkan-sen ascending and the Kijun-sen descending, a bearish crossover can spike short-term volatility as the Ichimoku Kinko Hyo Cloud maintains a moderate bearish bias. Traders should wait for the CCI to move below 100 and out of extreme overbought territory before adding buy positions in this digital asset. Can bulls overcome short-term bearishness and pressure the XRP/USD into a breakout until it can challenge its horizontal resistance area? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Should price action for the XRP/USD remain inside the or breakout above the 0.9200 to 1.0110 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 0.9640
- Take Profit Zone: 1.2920 – 1.3455
- Stop Loss Level: 0.8460
Should price action for the XRP/USD breakdown below 0.9200, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 0.8460
- Take Profit Zone: 0.6900 – 0.7460
- Stop Loss Level: 0.9200
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