In the past month, the price of XRP surged 91% as the digital asset finally found some spark and is now playing catch-up with Bitcoin (BTC) and Ether (ETH). Possible catalysts for the XRP rally are the rise in unique titles, Ripple buybacks, and the possibility of a new product release.
Increase unique XRP addresses
On-chain data can be useful in depicting public sentiment around a cryptocurrency, as it accurately reflects the activity that occurs on the blockchain.
In the case of XRP, headlines interacting with XRP surged in late November. The trend intensified when the cryptocurrency surged 27% in one day on November 22.
Analysts at Santiment, an on-chain analysis firm, said the one-day increase in active titles was the largest since May 1. books:
“Ripple’s price is up 27% today, with the amount of unique addresses transacting on the XRP network in dollars in a single day (24408) is the highest output since May 1.”
Active titles can increase along with the price for several reasons. First, the number of addresses where XRP is accumulating can cause its value to rise further. Second, there could be a general spike in user activity on the blockchain.
Ripple buybacks could drive XRP price up
During the third quarter of 2020, Ripple purchased $45.5 million worth of XRP in a buyback program. The company described the initiative as a step to support healthy markets.
The sales summary included in the Q3 2020 report details total purchases of $45.5 million. In previous quarters, Ripple did not buy back XRP. The report stated:
“As shown in the Q2 2020 XRP Market Report, Ripple is buying – and may continue to buy – XRP to support healthy markets.”
A buyback can increase a buyer’s demand for an asset, be it stocks, commodities or cryptocurrencies.
Although $45.5 million may not be a large enough number to significantly affect the value of XRP in the cryptocurrency exchange market, it may have boosted market sentiment around the asset.
Ripple may launch a new service
In early November, Ripple Labs filed a trademark for a product called Paystring with the United States Patent and Trademark Office.
The Paystring brand application describes a product within the category of electronic financial services for receiving and sending remittances. It states:
“PAYSTRING trademark registration is intended to cover the categories of electronic financial services, that is, monetary services for receiving and disbursing transfers and cash gifts in fiat currencies and virtual currencies over a computer network, and the exchange of fiat currencies and virtual currencies over a computer network.”
The confluence of excitement surrounding the release of a new product, XRP buybacks, and a bullish headline shown in the on-chain data may be the primary factors behind XRP’s recent rally to a 16-month high.
Thus, XRP managed to break out of two multi-year ranges on the higher time frame charts. Notably, the weekly chart shows a clear breakout from a price level not seen since November 2018.