Ripple (XRP) – Outlook Summary
|XRP Predictions: First Half of 2022
the price: $1.20 – $1.40
Price drivers: Bullish crypto sentiment eases, favorable outcome of SEC lawsuit
|XRP forecast: 1 year
the price: $1.80 – $2.00
Price drivers: Ripple adoption, back listing in popular DEXs/CEXs
|XRP forecast: 3 years
the price: $3.00 – $5.00
Price drivers: More regulation, more adoption from the financial sector, Ripple IPO
2021 was a turbulent year for Ripple (XRP). On January 1, 2021, the year started in a sluggish fashion, trading near the lows of $0.2375. Fast-forward three months later – Ripple hit a new all-time high on April 14, hitting $1.9669, a staggering 728% gain in just three months!
However, the journey of Ripple (XRP) has not been a straight line, as it has seen massive volatility, along with the entire cryptocurrency market. Since it hit all-time highs, it has been trading in a wide range, from the support level at $0.50, to the psychological resistance at $2.00. Then the momentum left and was replaced by volatility and a downtrend.
Over the course of the year, RippleLabs faced a lot of regulatory hurdles, chief among them the lawsuit initiated by the US Securities and Exchange Commission. Add to this the negative news that several exchanges have been deleting the cryptocurrency Ripple (XRP), including one of the largest, Coinbase. All eyes of investors are now focused on the SEC’s lawsuit, and how the judicial system will judge this matter. The result could either make or break the ripple.
Recent changes in the price of Ripple
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RippleLabs is the company behind the XRP coin. The company’s goal is to make international money transfers cheap and easy, in direct response to the slow and tedious process used in international money transfers globally.
They offer XRP as a solution to get around the way banks operate nowadays which can take a long time, given the lengthy process they have to go through to get approved for an international transaction. Bank customers who want to transfer money from one country to another need to pay unnecessarily high fees for the transfer. These fees are collected by the banks and other intermediaries needed to carry out these international transfers. Sometimes currency transfers have large spreads as well, which means that the customer will be left with a much lower cash value when the money transfer reaches the other side. Moreover, you also need to check whether a particular country is supported by the local bank or not, if not, you cannot transfer money to that country. The current international banking model is simply too slow and too annoying for the general public.
RippleLabs created XRP and RippleNet to help alleviate this sore point. They boast that Ripplenet is cheaper and faster than today’s slow banking. At the same time, it is compliant with anti-money laundering laws and regulations, and can even detect fraud. This innovation has encouraged investors and many banks to support this endeavor. Popular financial institutions that have partnered with RippleLabs include: American Express, Bank of America, Santander Bank, TransferGo and Xendpay.
RippleLabs has also created a cryptocurrency Ripple (XRP), which is based on the blockchain. You can convert XRP in less than 10 seconds, with a fee of only $0.0002 which is much cheaper than what banks charge for international transactions. And since it is on the blockchain, there are no restrictions when it comes to your site. You can trade XRP anywhere in the world, as long as you have an internet connection.
XRP is currently the eighth largest cryptocurrency by market capitalization. At the time of writing, it has a market capitalization of 39,436,190,028 USD, a circulating supply of 47,535,964,473 XRP and a maximum supply of 100,000,000,000 XRP coins.
Ripple price predictions for the next three years
Further adoption by the traditional financial sector
RippleLabs’ innovative technology has already proven to be a game changer in the traditional financial sector. The adoption of blockchain technology by banks and financial institutions will be the primary driver for Ripple (XRP). Currently, many money transfer services and banks are using or trying XRapid as an alternative to SWIFT. High-profile companies such as Xendpay, American Express, WesternUnion, Transpaygo, Euro Exim Bank, Bank of America and TransferGo have partnered with, or at least tried, this fastest and cheapest way to make international transfers.
More regulation and clarity, when it comes to laws, could help the adoption of Ripple (XRP) by the traditional financial sector. As more and more financial institutions understand the regulatory environment, they will begin to realize how much money they can save by adopting technology. More adoption means more demand in the market, which will inevitably lead to an increase in the price of XRP.
Saudi Electricity Company’s lawsuit over termination, Ripple’s initial public offering
Arguably the most significant price driver for Ripple (XRP) is the imminent end of the SEC’s lawsuit. I believe that a positive result will push prices to all-time highs, while a negative result will force the price to fall to new lows.
In the lawsuit filed in December 2020, the SEO insisted that Ripple (XRP) is a security, not a currency. The SEC has accused Ripple of selling $1.3 billion in securities. For context, security refers to a company’s stock, or bond, as opposed to the US dollar which is a currency. The Securities and Exchange Commission itself has approved major cryptocurrencies Bitcoin (BTC) and Ethereum (ETH) as currencies rather than securities, making the lawsuit somewhat dubious to say the least.
Politics may be part of why this happens to Ripple (XRP). Perhaps a lot of innovation and adoption has caused this, as a lot of money will be lost if most financial institutions use XRP in their international transactions. However, the SEC lawsuit will expire, possibly around mid-2022. Ripple CEO Brad Garlinghouse has expressed the company’s desire to conduct an initial public offering in the traditional stock market, when the lawsuit finally ends, and this will certainly lead to increased demand for XRP.
XRP/USDT Technical Analysis: The main improvement line is intact, despite the recent bearish price movement
XRP / USDT – Weekly Time Frame: Major improvement line is intact
XRP/USDT weekly time frame chart shows that the recent weakness in the price action remains within the range of the long-term uptrend line. This uptrend line started in early 2020, when the price reached a low of $0.1013, and since then it has never returned to that price level, as it started climbing towards all-time highs in May 2021, almost reaching 2.00 dollar. As long as XRP/USDT does not fall below this major uptrend line, long-term stock holders can hold their own, as there is no major technical reason to sell yet.
The daily time frame is showing a short term downtrend
On the other hand, the shorter daily time frame for XRP/USDT presents a somewhat bearish picture in the medium to short term. The infamous bearish technical indicator, the death cross, has formed as the 50-day moving average (gray line) crossed below the long-term 200-day moving average (purple line). Moreover, price action failed to rise above the 200-day moving average (purple line) indicating further weakness. It is currently at the support level of a scientific model, which started forming in May 2021, and a drop from this level could mean a drop in XRP/USDT to the 0.50-0.51 immediate support level.
The most positive case for XRP/USDT will be a recovery from the current price levels, with further consolidation and full tightening, forming a pennant, and finally a breakout above the file. The consolidation of the flag pattern will converge at a pivotal point by mid-2022, which, coincidentally, is also the expected time that the SEC’s lawsuit will end. This could either make or break XRP/USDT, depending on whether or not the judgment goes its way.
As a trader and investor, I suggest staying on the sidelines and waiting for further confirmation before entering XRP/USDT. The sentiment of the cryptocurrency market in general is shaky and unfavorable at the moment, and in the near future, there will be more headwinds, led by the SEC lawsuit. Once things are clear and more information is provided to RippleLabs, it is time to take action. In the meantime, we’ll wait and watch.