Summary
- The digital currency is facing a lawsuit, and some investors are pulling back from it.
- Ripple remains among the six top digital currencies globally.
- Even though Ripple is facing a rough time, some institutions have seen a good opportunity to invest in.
Ripple’s troubles continued today, going down 6% to trade at $0.431. XRP is under immense pressure, not only from its legal troubles but also from her peers. Ripple’s competitors, such as Ethereum, have been outperforming it over a long streak.
Despite its troubles, Ripple has been resilient, enabling it to hang on to remain among the world’s top six cryptocurrencies. It is currently trading at a price 84% higher than a similar period last year. XRP’s trading volume has, however, created a cause for concern. In the last 24 hours, its traded volume has reduced from nearly $8 billion to $6.8 billion.
The storm within Ripple
Ripple faces a lawsuit filed by the Securities and Exchange Commission (SEC) late last year. The alleged accusation is that Ripple has been unlawfully selling the digital currency, and its securities are not registered.
The lawsuit has become an impediment to the price of the digital currency. Consequently, the value of Ripple (XRP) seems to be decreasing. Institutions that invested in this currency are pulling back as a result.
One of the institutions that are pulling back investment is MoneyGram. Three days ago, the company stated that it would be suspending its partnership with Ripple until the lawsuit was settled.
Similarly, early this year, another key investor, Tetragon, sued Ripple in an attempt to recoup its stocks. Coinbase also stopped selling the digital currency on its platform after it was sued by SEC.
But, there could be light at the end of the tunnel. Some analysts believe that Ripple will win the lawsuit. A few days ago, Mary Jo White, former chair of the Securities and Exchange Commission (SEC), opined that the lawsuit is a mistake.
The prospect of a win for the digital currency has kept hopeful investors holding on to it. Also, some investors are buying XRP during this price plunge with hopes of a favorable outcome for Ripple. These actions have slowed down a potentially calamitous price drop.
Going against the tide
Despite being dragged into a lawsuit, Ripple continues to attract new investors. Notable actors include a Malaysian company called Mobile Money and bKash in Bangladesh. The companies teamed up last month to facilitate financial transactions between Malaysia and Bangladesh using Ripple.
The good news keeps coming Ripple’s way. Earlier this month, SBI VC Trade, a Japanese digital currency agency, expressed its intention to add Ripple to its cryptocurrency lending platform.
Earlier this week, Caitlin Long, the founder and CEO of Avanti, gave Ripple valuable publicity amidst a crisis when she stated that she welcomed Ripple to Wyoming.
The cryptocurrency is doing much to maintain a positive outlook. In January, Ripple vowed to attain zero carbon by the year 2030. The company has also partnered with top-ranking universities to evaluate energy consumption by cryptocurrencies, cash, and credit cards. This move is likely geared towards attracting environmentally-conscious investors.
Even though XRP’s price has taken a hit from the SEC lawsuit, its continued attraction of institutional investors and bullish individual buyers will significantly slow down losses. A win in the lawsuit will almost certainly trigger an upward XRP price rally.
XRP/USD technical outlook
Ripple’s price has declined, as observed in the past 24 hours. XRP/USD is nearly $0.431. This looks likely to rise to the support level at $0.450 and oscillate between that level and $0.523 where it will encounter resistance.
A fall below $0.431may be short-lived and may only reduce to $0.410. A break past the second resistance will rally XRP price to retest the week-high $0.648