Ripple (XRP) – Forecast summary
|XRP forecast: H1 2021
Price: $ 0.55
Price controls: Positive cryptocurrency sentiment, XRPs in circulation, SEC legal battle price in the market
|XRP forecast: 1 year
Price: $ 0.30
Price controls: declining bullip cryptography, underperforming USD performance, Ripple coin sales, SEC judgment
|XRP forecast: 3 years
Price: $ 0.15
Price controls: Increased competition, further regulation, possible legal fall from 2021 SEC judgment
Shain Vernier, American analyst
The fourth quarter of 2020 (Q4) is remembered as a pivotal time for cryptocurrencies. The strong bullish sentiment dominated the asset class as the coronavirus (COVID-19) and political uncertainty began to prevail. The partial reopening of the global economy, the decision of the United States in the general election, and the final conclusion of the Brexit saga all sparked optimism for many asset classes. The COPID-19 panic sale in March 2020 is long gone – instead it was optimism fueled by recovery.
The fourth quarter of 2020 proved to be a downturn for leading crypts. Among the biggest winners were Bitcoin (BTC) and Ethereum (ETH), both of which set a new record. Unfortunately, Ripple (XRP) didn’t present the epic offer that many other crypts made. During the fourth quarter, XRP exceeded $ 0.78; only about 24% of the peak of $ 3.30 in January 2018. The end of 2020 brought a euphoric purchase into much of the cryptocurrency asset class; for XRP, cryptothelium continued.
Current Price: $
Recent changes in the Ripple price
|Period||Change ($)||% Change|
|30 nap||+0,29 USD||+104%|
|3 months||+0,30 USD||+1,11%|
|6 months||+0,27 USD||+90%|
|1 year||+0,26 USD||+86,7%|
|3 years||-0,56 USD||-47,5%|
Ripple Live Chart
Like other cryptocurrencies, the XRP market is driven by a diverse collection of funds. Rumors, government regulation, general acceptance, and corporate health are four common market drivers that XRP shares with the rest of the asset class. However, XRP is an extremely unique product. Launched in 2012, Ripple has a long history as one of the leading coins in market capitalization. The 100 billion floating mammoth and extremely low-priced XRP is considered by many to be the “silver of cryptocurrencies”. If you can’t afford a BTC or ETH, then XRP seems like the right solution.
From the beginning, XRP pricing has been regularly taken down the ladder with leading cryptocurrencies. One of the main reasons for this is that XRP is just one of the tools promoted by its parent company, Ripple. In addition, XRP is not “mined” by the public, such as BTC, ETH or Litecoin (LTC). Back in 2012, Ripple beat 100 billion XRPs that Ripple regularly sold to the public. As of 2021, there are only about 45 billion in circulation – the other 55 billion will be kept by Ripple for future distribution. This is a highly controversial aspect of XRP pricing; in theory, Ripple can “market” large quantities of XRP blocks as needed. Because of this functionality, the question arises as to whether or not the price of XRP can be manipulated directly by its parent company.
Factors influencing the wave meter
The value of cryptocurrencies is an interesting study of supply and demand. In fact, experts argue that the BTC’s tight supply is the first reason for the steep 2020/21 rally from $ 3,500 to $ 50,000. As of January 2020, there were approximately 18.5 million BTCs in circulation, with a maximum supply of 21 million. Basically, the inherent scarcity of BTC caused a significant jump in value as demand increased. The demand and supply dichotomy of the XRP is almost 180 ° from the BTC – plenty of XRPs are available and more are in reserve. A key factor influencing the future forecast of the coin’s value is the Ripple, XRP, and supply / demand ratio.
Ripple (XRP): 5-year prediction
In the first quarter of 2021, it would be a challenge to argue against the bullish sentiment that dominates much of the cryptocurrency asset class. Prices reached astronomical peaks as the general introduction of crypts was around the corner. Still, the future of Ripple and XRP was extremely uncertain. The lawsuit filed by the U.S. Securities and Exchange Commission (SEC) against Ripple threatened the company with a serious threat. In addition, a multitude of outsiders were ready to bring new competition to the cryptobank sector. Finally, the five-year value of XRP depends on how the SEC, industry competition, supply in circulation, and aggregate cryptocurrency performance stand out to its competitors.
How does supply and demand affect XRP prices?
Whether you trade stocks, commodities, currencies or cryptography, supply and demand are one of the main drivers of valuations. The general rule is this: if stocks are low and demand is high, prices will rise. From mid-2020 to February 2021, strong residential and institutional demand for crypts pushed prices to record highs. XRP was excessive – why? The answer lies in the supply relationship between XRP, its parent company, Ripple and the trade.
Before understanding the XRP supply / demand curve, it is important to review the methodology for handling Ripple coins. As of February 2021, Ripple Inc. held approximately 6.3 billion XRPs while placing an additional 48 billion in cryptographically secured escrow accounts. This left about 45.6 billion XRPs in public traffic out of a total of 100 billion. In fact, Ripple controlled roughly 55 billion XRPs, while the public controlled 45 billion; 55/45 majority division. As of mid-February 2021, the price of XRP was $ 0.60, bringing the total market ceiling to roughly $ 60 billion – Ripple had $ 33 billion directly. It makes sense that when Ripple decides to market more XRPs, it has a significant impact on prices.
In order to increase the distribution of XRP, Ripple needs to sell coins to customers. Here is an overview of Ripple’s official sales policy: “Since 2012, Ripple has systematically sold XRP and used it to encourage its market-making activities to increase XRP liquidity and strengthen the overall health of XRP markets.” In other words, Ripple sells XRP to ensure operation and pricing efficiency. So how will Ripple handle this progress? This is a tricky question. In the second half of 2020, Ripple became increasingly active in the XRP markets. For the third quarter of 2020 (July 1-September 30), Ripple sold $ 81.39 million worth of XRP and purchased $ 45.55 million net. $ 35.84 million. The fourth quarter (October 1 and December 30) proved even more aggressive. For the fourth quarter, Ripple sold $ 111.12 million worth of XRP, $ 34.85 million, for a net $ 76.27 million.
The bottom line is that as prices rise, Ripple has sold more XRPs. In the third quarter of 2020, the XRP was between $ 0.17 and $ 0.25; In the fourth quarter, this range spread north, ranging from $ 0.25 to $ 0.75. The Q4 exchange rate is worth a closer look. In early October, the XRP traded around $ 0.23; Mid-November brought a high peak of $ 0.76; as of December, prices fell to $ 0.21. Basically, Ripple started selling XRP, traders followed suit, and prices moved faster and lower.
Considering the huge range of XRPs directly controlled by Ripple, the sale of new coins is an extremely bearish market driver. In the event that Ripple needs a capital injection or is forced to disperse the deposited coins, XRP prices will suffer. Until XRP reserves are depleted and coins in circulation become the majority of the total supply, Ripple XRP sales pose a huge downside risk. Conversely, if Ripple stops selling XRP for an extended period of time, prices are likely to stabilize or move higher.
The SEC Vs Ripple Spoil Reviews?
On December 22, 2020, the U.S. Securities and Exchange Commission (SEC) announced that it had filed a lawsuit against Ripple Labs Inc. The SEC’s claim was based on allegations that more than $ 1.3 billion had been raised through an ongoing offer of unlisted securities. The SEC has complained that co-founder Christian Larsen and CEO Bradley Garlinghouse from 2013 have helped Ripple sell XRP billions unregistered to finance the corporate business. In addition, Garlinghouse and Larsen sold $ 600 million worth of XRP for personal gain. Basically, the SEC alleges that these XRP sales violated federal securities laws. Executive Director Stephanie Avakian summarized SEC’s position:“Issuers seeking the benefits of a public offering, including access to retail investors, wide distribution and the secondary trading market, must comply with federal securities laws that require the registration of offers, unless an exemption from registration applies. We allege that Ripple, Larsen and Garlinghouse did not register their ongoing offer and the sale of billions of XRPs to retail investors. ”
The point of SEC vs Ripple is the question of whether the XRP is a value or not. In their first response to the fees, Ripple states that XRP is not an investment contract but a cryptocurrency. Andrew Ceresney, an outside consultant at Ripple, could say this about the claims : “The SEC case is unprecedented and ill-conceived. The SEC has ignored the clear virtual currency status of the XRP, contradicting not only the findings of other regulatory agencies but also international regulatory regimes. The SEC is now going beyond the notion of an “investment contract”. “Theoretically, Cerenskey has a point. The role of XRP is to facilitate cross-border transactions. In addition, hundreds of stock exchanges are traded worldwide, far beyond the scope of the U.S. SEC. In a 2019 interview with the CNBCC, Jay Clayton said of cryptographic asset classification: “Cryptographic money; they are substitutes for sovereign currencies. This type of currency is not a security. “ Previously, Clayton reiterated that all the initial tender coin (ICO) securities and ” If it is a security, the [SEC] is controlled. “
While it’s always hard to predict what’s going to happen in court, it looks like Ripple has a formidable defense. The key aspects of the case are that Ripple never had an ICO at XRP and XRP owners are not entitled to a share of the company’s profits. At least with respect to Clayton’s comments, these two elements appear to preclude XRP from qualifying as a security. However, it is no coincidence that the gathering of crypts brings this case to new heights. The idea of keeping cryptocurrencies as an investment – rather than using them for commercial purposes – catches up with institutional investors. Via SEC vs Ripple, the U.S. government appears to be interested in setting a huge new precedent for cryptocurrencies by labeling them with securities. This is an extremely invasive move, as any cryptographic purchase, sale, or transfer could potentially fall under SEC jurisdiction.
The SEC’s announcement in December 2020 brought a huge sale to XRP. In the aftermath, traders ran to the mountains, initiating a 50% two-day plunge in the XRP from $ 0.50 to $ 0.25. Although prices rebounded in January 2021, the impact of the lawsuit was huge. Going forward, one thing is for sure – Ripple and XRP are on the U.S. government radar. No matter what happens in SEC vs. Ripple 2021, this case is probably just the beginning. If the SEC successfully defines XRP as security, under the leadership of Ripple, the entire cryptosphere will achieve a huge correction.
Does XRP have a sustainable competition ??
In essence, the XRP is a tool for streamlining cross-border transfers between financial institutions. Back in 2012, a cheaper, faster alternative to Bitcoin was reported. Using Ripple’s centralized digital infrastructure, XRP was able to avoid blockchain loggames by eliminating the consensus algorithm needed to facilitate transactions. Using a collection of about 35 XRP “validators”, Ripple can process transactions quickly, in 3-5 seconds. At the time, Ripple and XRP were considered by many to be the future of the banking sector. Companies like American Express, MoneyGram, and PNC were among the first to use the starting technology.
Of course, a lot has changed since 2012. Competitors such as Stellar, DrumG Technologies, IOTA and Ethereum have also directed their efforts towards the banking sector. In addition, consideration should be given to the possibility of central banks operating independently in a cryptocurrency. Currently, beta tests of cryptocurrency products are performed by the US Federal Reserve (Fed) and the European Central Bank (ECB). The forecast by Christine Lagarde, President of the ECB, from November 2020, suggests that the “digital euro” will be introduced in 2-4 years. If FedCoin or the digital euro becomes a reality, the role of cryptocurrencies in the banking sector is likely to be under intense scrutiny. If the world’s leading central banks create their own digital books, will XRP functionality be needed?
It is realistically impossible to predict the evolution of an advanced asset class such as cryptocurrencies. However, if digital money is dominated by central banks and governments, XRP may have a hard time finding a niche in the new ecosystem.
Ripple (XRP) Technical Analysis
The fourth quarter of 2020 was an extremely active period for XRP. During the March 2020 collapse of the COVID-19 market, the XRP bottomed out at around $ 0.12. By the end of November, a relatively narrow trading range had developed between $ 0.15 and $ 0.32. As cryptocurrency prices exploded during the fourth quarter, the XRP peaked at $ 0.78 before falling to $ 0.17 after the SEC lawsuit was announced. January and February brought a rebound, with prices re-testing the November highs.
By February 14, XRP was well above the 100-day ($ 0.40), 150-day ($ 0.34), and 200-day ($ 0.33) simple moving averages (SMAs). These areas will be set as key levels in the first half of 2021. It is also important to note the flat trajectories of these SMAs. In addition to the huge dive in March and the peak at the end of November, the XRP was flat for most of the year. Nevertheless, XRP grew by more than 10% in 2020 (+ $ 0.02); pricing for spikes and collapses was representative – not traditional peaks and depressions.
From a macro perspective, rising activity in the fourth quarter of 2020 and early 2021 is the first time that XRP has shown life since 2018. And even amid the $ 0.78 peak in November, prices were still well below all peaks above $ 3.00. Furthermore, the November 2020 rally lagged well behind the 38% Fibonacci retracement of the 2017-2018 breakout range ($ 1.33). This is a key long-term resistance level that has not yet been tested.
At the beginning of this writing, the technical prospects for XRP are versatile. Over the daily time frame, bullish bias can be observed as prices have again kept the line at $ 0.50 and are above medium-term SMAs. In contrast, the big picture technique shows a bearish market that is well below XRP’s 38% Fibonacci retracement ($ 1.33). The most important long-term support levels will be the big round numbers: $ 0.20, $ 0.15, and $ 0.10; the upper resistance level is $ 1.00, 38% ($ 1.33), 50% ($ 1.71), and 62% ($ 2.08) are psychological barriers to Fibonacci retracements.
By 2021, moderately bullish bias is warranted if the XRP exceeds the 100, 150, and 200-day moving averages. If these levels were to be jeopardized, the long-term bearish bias and consolidation pattern should set a precedent.