Adoption is the foundation of any successful product and that is what Ripple the company has been eyeballing in the last eight months. And they have been largely successful. Different by different objectives, the RTXP protocol was designed with financial institutions and remittance service in mind and the more they join the network, the more valuable XRP becomes.
There are two undeniable facts that should hint of lagging XRP:
First, the admission that Ripple the company has been successful in their pitch. Within eight months, we have seen high profile partnerships as banks agree to test several of Ripple products as xVia, xRapid—a liquidity provider and xCurrent—the payment solution processor. Some of these high profile banks include Kuwait Finance House. In fact, the rate at which companies are testing Ripple products has got the eyes of RBC Capital Market, a wing of the Royal Bank of Canada, who in their report said companies incorporating Ripple as a solution could reap big from improved transparency, remittance settlement speed, costs and most importantly on efficiency. This bodes well with Brad Garlinghouse, the CEO of Ripple-who in Q2 predicted that XRP and Ripple solutions would become a stead by the end of the year. If that is surely the case, then we expect prices to recovery as the year comes to a close.
Secondly, Ripple’s on chain developments and their determination to decentralize could turn things around. Though they still hold a ton of XRP, the decentralization tag would be purged once and for all saving the company figure heads going on a defensive at pressers. Then again, news that Ripple Labs and R3 Consortium off-courts settlement might after all be a pointer of things to come on how they handle court matters.
XRP Technical Analysis
The thing is, XRP sellers are in charge and the 22 percent week over week drop reflects this position. As visible from the chart, not only are prices on a decline but last week’s losses did confirm week ending Aug 12 break below 40 cents, triggering sells in the process. If anything, recent losses are but a follow through of the dominant bear break out pattern through which price action is revolving around. Unless otherwise there is a firm break and recovery of last week’s losses which would see XRP printing above 35 cents and even 40 cents buy the end of the week, we recommend taking shorts on every high in lower time frames with targets at 15 cents.
So far so good for sellers but from a risk reward point of view, we suggest taking a neutral stand. Note that bears are trading around our minor support line at 25 cents which also marks Aug 2018 lows. For trend resumption then we need to see confirmation of yesterday’s sellers and it would be preferable if a whole candlestick closes below 25 cents. That shall cement and even confirm sell momentum giving a pass for traders to short on every pull back retesting 25 cents in lower time frames with targets remaining unchanged.
Disclaimer: Views and opinions expressed are those of the author and aren’t investment advice. Trading of any form involves risk and so do your due diligence before making a trading decision.