Ripple (XRP) has continued its negative slide over the past month, having lost 82% of its value since the all-time high set in January. The market cap now stands US$59.25 billion, with US$383 million in trading volume over the past 24 hours.
Ripple (XRP) has continued its negative slide over the past month, having lost 82% of its value since the all-time high set in January. The market cap now stands US$59.25 billion, with US$383 million in trading volume over the past 24 hours.
The company behind XRP, Ripple Labs, continues to increase global brand awareness and adoption. The network, RippleNet, is composed of; xCurrent, which processes global payments for customers; xRapid, to source on-demand liquidity; and xVia, to plug into RippleNet to send payments.
Six major financial institutions have publicly announced that they are piloting xRapid, including Cuallix, MoneyGram, IDT Corporation, Mercury FX, Western Union, and Cambridge Global Payments. Ripple has also announced a MoneyTap app which will roll out at three of its 61 partnered Japanese banks this year. Additionally, plans to launch in China also appear to be on the table.
Sending a Ripple transaction is also consistently cheaper than any other large market cap network. It currently costs US$0.0037. While transaction fees typically rise and fall in line with the cost of the coin itself, Ripple links their fee to network traffic. Each transaction must destroy a small amount of XRP, which increases along with the load on the network, making it very expensive to deliberately or inadvertently overload the network.
While the network has seen steady growth, it also had the smallest rate of change in transactions per day over the past year, when compared to other high market cap coins.
The network value to estimated on-chain daily transaction ratio (NVT) has also been trending lower since July 2015 suggesting transactional use has increased since that time, reaching a low of 75 in January. Although NVT is difficult to compare between coins which use different transactions types, it can be used to assess the network’s relative utility over time. Daily NVT remains relatively low based on historical data.
XRP is traded on all the major exchanges, with the highest percentage in the Korean Won (KRW) markets. The KRW market on Bithumb typically commands a 2.7% premium, when compared to USD markets. XRP has been very popular on Bithumb since being added in May 2017. XRP is not nearly as widely traded in JPY or CNY, largely due to trading pair availability and continues to be added to exchanges around the world. Binance, a popular exchange which gained seven million users in 100 days, is reportedly working on fiat gateways and trading pairs, including XRP.
Technical Analysis
While traders normally use charts from the highest volume exchange, the broader XRP/Tether (USDT) market has the most available data. Indicators like Ichimoku Cloud, Exponential Moving Average (EMA), and Chart Patterns can be used to determine if a trend exists or when the next breakout move may occur. Details of the indicators and methods used below can be found here.
On the three day chart, despite being in an obvious downtrend since January, a potential falling wedge type pattern has been forming over the past 80 days. The pattern concludes near the S1 yearly pivot, around mid-April, and has a measured move and 1.618 fib extension between US$4-5. The pattern will fail with a break of the diagonal support or S1 yearly pivot.
On the daily chart, the Ichimoku Cloud metrics are bearish. The Cloud uses four metrics; the current price in relation to the Cloud, the color of the Cloud (red for bearish, green for bullish), the Tenkan (T) and Kijun (K) cross, and the Lagging Span. The best entry always occurs when most of the signals flip from bearish to bullish, or vice versa.
The current Cloud metrics on this time frame are; price below a bearish Cloud, a bearish TK cross, and Lagging Span below Cloud and Price. As is often the case, the Kijun (red line) acts as a major level of support or resistance for the trend. Until the Kijun is breached, the trend remains intact.
A long flat Kumo (yellow arrow) at US$1.75 has been forming over the past month. This occurs when price drops quickly but does not continue to make lower lows. This horizontal is a high probability zone should price continue to hold without making lower lows. There is also a bullish divergence forming on the relative strength index, suggesting that bearish momentum is waning.
A traditional Cloud long entry will not occur until the price is above Cloud. However, should price breach the Cloud on a daily close with a bullish TK cross, an edge to edge long trade triggers with the target being the opposite edge of the Cloud. In this case, US$1.75.
Fresh asks and stop losses for current shorts likely reside near or above the Kijun at US$0.97. A bearish 50/200EMA cross, or death cross, will likely result in further downside beyond the yearly S1 pivot. Temporary trend reversal would become probabilistic if the current bullish divergence continues to hold. A capitulative downward spike, potentially between US$0.40-0.50 is likely upon breaching the yearly S1 pivot.
A Pitchfork on the four-hour chart, with anchor points in December and February, shows price near the median line (ML) or mean of the downtrend. A long entry would not trigger until the Pitchfork is invalidated above the yellow diagonal zone. If the ML fails to hold as support, a move towards the bottom yellow diagonal zone is likely. The 50/200EMA cross also remains bearish with the 50EMA acting as resistance since early March.
Conclusion
The company behind ripple continues to gain strategic banking partnerships across the globe, including Asia, the middle east, and Mexico. These partners help support the push for Ripple to become a major participant in interbank settlement and cross-border payments. Whether these partnerships will result in either a longer-term deal with Ripple, or an increase in the value of XRP, remains an open question. A direct fiat gateway pair on either Binance or Coinbase would be a speculative driver to move price substantially.
Technicals suggest price is nearing an inflection point. Although bearish momentum may be waning, price remains in a strong downtrend near a key support level. A definite bullish reversal would trigger with a break of the 80 day and counting falling wedge chart pattern with targets of US$1.75 and eventually between US$4-$5.
