While the crypto market is in a general bear slide, Ripple is amongst the top performers in the last 24 hours. To quantify, Ripple is up three percent rejecting sellers’ attempt to drive prices towards 40 cents which double ups as Q2 and April lows. 40 cents is basically a key support line in our analysis and all things constant, it might as well as be a spring board for buyers in the days to come.
From the News
Just a single announcement from the SEC and various coin supporters are already churning dissertations explaining why their digital assets are utilities. According to the SEC, decentralization is the top consideration and a filter that qualifies a coin as a security or a utility. As we all know, XRP token and Ripple Labs are one and the same thing.
XRP token came to existence because of the RTXP Protocol. XRP is an enabler for companies using the Ripple Protocol gateways as they can settle their transactions instantly. By definition, this coin is nothing more than a liquidity tool. That’s its sole purpose and as an infrastructure specifically meant for banks and an alternative to slow SWIFT, financial institutions can decide to forego XRP but still use other Ripple products as xRapid and xCurrent.
Back to decentralization and many think there is an element of decentralization in Ripple. Here we have Ripple Labs though with a decentralization strategy in place whose first phase is up for implementation next month, the sheer amount of coins at their disposal is a worry. Brad Garlinghouse says this is a non-issue but as long as they have these coins and control network validators, freeze user accounts at will, then we have nothing more but centralization.
Currently, supporters point to FinCEN and how their 2015 agreement is binding but what many forget is that FinCEN and SEC are two different entities with diverging objectives. FinCEN goals are simple: Nab illegal financial transaction and ensure facilitators adhere to AML, KYC and ATL laws and regulation. On the other hand, SEC is in place to protect investors in the securities market. It’s basically an oversight role which FinCEN isn’t. So whether SEC consider XRP a security or utility is upon their main criteria: Decentralization.
Ripple (XRP) Technical Analysis
From this chart we can easily note that bears took approximately two months to reverse April gains. By all accounts this is purely a case of effort and result. Volumes reflect this struggle because while we can see sellers having an upper hand, volumes are noticeably lower.
In fact, the past eight weeks average volume is around 25 million. We can’t compare that to April’s which stood at around 65 million. So, whether we were witnessing a long covering or not, price action will prove. What we know though is that XRP is beginning to find support in lower time frames.
After periods of lower lows and consolidation, it appears as if XRP prices are likely to rise. Relative to our overall bearish stand, it is likely that buyers would have an upper hand. It isn’t hard to see why after June 18 bullish confirmation yesterday.
As such, buying on dips on lower time frames with stops at 45 cents would be safe. From previous forecasts, targets at 70 cents and later $1 assuming bull pressure is strong is ideal. Otherwise, ideal buy triggers for conservatives would be at 60 cents when XRP prices are above recent accumulation or June 12 highs.