Summary
- The outcome of Ripple’s case against the SEC could be a major turning point for its price trajectory.
- The US economy and institutional investments greatly influence XRP prices.
Ripple was against high odds today, with investors hoping for a break past the 10-day high of $0.4869 set yesterday. XRP was trading at 0.4561 at press time, which was about 6% lower than yesterday. The price had a corresponding 11.3% fall in trading volume over 24 hours.
XRP’s price resilience has seen it register a $20 billion market capitalization, making it the 7th largest cryptocurrency. Ripple’s much-publicized $1.3 billion legal battle with the Securities and Exchange Commission (SEC) remains the single biggest hindrance to institutional investment in this cryptocurrency.
Going against the tide
Despite running into legal headwinds, XRP’s parent company, Ripple, is in the process of piloting an XRP ledger designed for Central Banks. The platform aims to enable central banks worldwide to create and manage their own digital currencies. This would enable the entities to have their own private ledgers capable of facilitating payments.
If the venture succeeds, it could present the company with a niche market under the auspices of the world’s largest financial decision-makers. That would spark a major XRP price rally.
However, most governments are known to be skeptical and suspicious about cryptocurrencies, thereby limiting chances of broad acceptance.
Notwithstanding the legal hurdles brought about by the Securities and Exchange Commission (SEC), Ripple has secured contracts with no less than 15 banking institutions outside the United States. In an interview with Reuters on Friday, Ripple CEO Brad Garlinghouse added that the Asia-Pacific region had clearer laws on securities and that the company had not recorded any loss of business in the region occasioned by the SEC’s move.
Mr. Garlinghouse was confident that XRP would shake off the effects of the SEC’s lawsuit in the United States. He stated that this would be possible since the shockwave created by the XRP’s suspension from America’s “three or four exchanges” would be neutralized by the remaining over 200 exchanges trading in XRP around the world.
However, the SEC lawsuit continues to cost XRP in America. In the latest hit, TapJets has moved to expunge XRP from its payment methods, marking another significant loss.
In the meantime, Ripple investors continue holding on to hope for a favorable outcome in the lawsuit. In the lawsuit’s latest development, the CEO, Brad Garlinghouse, has declared his intent to file a motion of dismissal against SEC’s charges. A win for Ripple would boost not only investor confidence in the company but also fuel an upward price rally.
The US Economy
The US bond yields have been on the rise in the past two weeks, leading to fear among investors that it was inflation-driven as opposed to economy-driven. Yields on US Treasury bonds rose to 13-month highs this week, compounding fears that the upcoming $1.9 million stimulus package might trigger an increase in interest rates by the Federal Reserve.
High-risk ventures like cryptocurrencies have suffered as a result, with the crypto-market correction following the suit. On Thursday, Federal Reserve Chairman Jerome Powell was non-committal on steps to be taken by the Fed to curb inflation, thereby creating renewed worries among investors. As Treasury yields continue to rise, the crypto-market is likely to struggle, and XRP may keep underperforming.
Technical outlook
Bulls will have to take charge above $0.452 to have a chance at hitting yesterday’s $0.487. If they let the momentum fizzle out, then a slide below $0.44 looks possible. XRP Price will find the first support level at $0.416 and the second support level at $0.440. The price at $0.460 is within reach, but the virtual currency will encounter the first resistance level at $0.479 and the second one at $0.487.
