15 Apr 2021 #XRP
Ever since the burst of the 2017 crypto bubble, the XRP price action was nothing but a source of frustration for those who believed that sky was the limit for the 3rd cryptocurrency even after it had hit the all-time high at $3,84 on January 4, 2018. This rise to the stratosphere, though, was based on pure hype and FOMO as all media outlets and crypto experts had been preaching about the inevitable rise to $5 or $6. Apparently, the unlucky investors ignored the advice from the great John D. Rockefeller, who said that the ripe time for getting out of the market is when a shoeshine boy, who makes a penny per shining job, starts giving out stock tips. He said that in 1928, but the wisdom remains relevant to this day, especially in the highly volatile cryptocurrency market.
Those who were certain that XRP would have kept on flying to the Moon were left holding the bags of rapidly devaluing coins as the price went tumbling down and XRP entered the period of a gruesome three-year-long bear market. For a long time, the coin became a laughing stock for the community of crypto traders who stayed out of this market.
Up until March 2020, which had brought upon traders a total market meltdown caused by the outbreak of COVID-19 pandemic, XRP had been regularly making lower lows on the macro time frame (weekly) while also establishing the multi-year magnetic level at $0.3, towards which the price of XRP had been drawn time and time again during all bull rallies that took place since August 2019, but always failed to break that resistance to the upside - until recently.
The XRP historical chart below clearly shows why nearly all cryptocurrency traders and investors were frowning upon that coin and wondering why it was holding such a high rank since other altcoins, for instance, Chainlink (LINK) and Binance Coin (BNB), were outperforming it by light-years.
XRP all-time chart. Source: CoinMarketCap
But as they say, even a blind squirrel finds a nut sometimes, and that’s exactly what has been happening to the XRP price in USD as it has stumbled upon the nut packed with bullish energy as XRP got literally catapulted to the upside in the past 7 days, having made the following gains:
The current price of XRP stands at $0.68, established after that parabolic rally over the past two weeks that had finally put the battered altcoin in the bullish context. However, unlike Bitcoin (BTC), which is presently only 3% away from the all-time high, and we predict BTC to establish a new ATH by the end of this year, the altcoin has a long, and presumably tough, way to go before it even starts threatening that highest XRP price level.
1-week XRP/USDT chart
The weekly XRP price chart above demonstrates that despite the impressive bull run, the green candle hasn’t even tested the 23.6% level on the Fibonacci retracement grid that clearly converges with strong resistance at $0.88 that was established in the first half of 2018.
The Stochastic indicator shows that the momentum has been favoring the bulls since the beginning of the year but was held back by the immense overhead resistance at $0.3. But after the resistance was broken, the price of XRP began to realize its upside potential, which led to enormous gains in such a short period of time.
Our proprietary XRP price prediction algorithm dictates that before the year’s end, the altcoin will gain another 65.23%, a forecast that corresponds completely with the ongoing momentum and the established resistance levels at $0.88 and $1.14 - the rise to the latter price level would cover the said 65.23% distance.
The Accumulation/Distribution (A/C) indicator also instills a great deal of confidence in XRP as it began to ascend from the lowest extremities, where it had been consolidating since Q1 of this year. Before that, the indicator had been falling ceaselessly since the tail end of 2017. The reversal of A/C to the upside points to the fact that the current rally is backed by a sufficient bullish volume, which is also evident from the chart. Right now, the price action holds the promise of transitioning to a full-fledged uptrend if the price of XRP establishes a foothold above $0,88 (23.6% Fibonacci) and makes an attempt at $1.14 in the first months of 2021. The probability of the rally continuing into 2021 is at about 70% since the XRP price history shows that the coin has always been drawn to the upside in the first quarter of the year, except for the infamous 2018.
Despite all trials and tribulations, it appears that XRP had finally begun to dig itself out of the gutter of the bear market. The time lag that formed between the steep rise of Bitcoin and the following resurgence of altcoins, which have already begun to nibble at the BTC dominance, gives XRP the much-needed upside potential that should allow to substantiate the growth of the XRP price in USD in 2021, and possibly 2022, if the bull market is maintained throughout the next year.
But what other factors have been influencing the current price of XRP and its bullish behavior, and would they allow it to sustain this run all the way to 2025? It is clear now that the emerging bull market is being supported not by retail investors who flock into the market as soon as FOMO kicks in, but rather by large institutional investors and whales who can move the market significantly without extraordinary spikes in trading volume - just like it happens right now.
Obviously, the majority of big investors give preference to BTC or ETH, as the former represents the new vehicle for value storage and hedging against inflation, whereas the latter has all the prerequisites to become the technological foundation for the blockchain economy and the future global financial system.
However, the on-chain analysis carried out by Santiment shows that XRP has had its share of interest from the whales who have been accumulating vast amounts of coins. In the past six months, the number of wallets that hold at least 10 million XRP (roughly $7 million) has increased by 10.4% from 280 to 309, whereas the number of addresses that store over 100 thousand XRP ($70 thousand) has ballooned by 19.7% (from 14,525 to 17,387). In addition, we have also noticed an enormous increase in active addresses on the backdrop of the recent rise of XRP price, which marks the spike in activity on the blockchain.
XRP active addresses
But the on-chain analysis on the all-time scale shows that the intensity of transactions on the XRP Ledger is miles aways from the showings seen at the tail end of 2019, when it reached the record high at 4.5 million transactions per day, whereas presently, this indicator sits at 1,5 million transactions, slightly exceeding the levels seen during the summer rally in the cryptocurrency market. Nonetheless, we see an almost ceaseless rise of transaction volume to the upside throughout the entire XRP price history, which demonstrates the slow but steady rise of usability of the payment solution from Ripple Labs.
XRP transaction chart
The increase in whales’ addresses and transaction volume comes to show that users and investors, along with their money, are flowing back into this market, the usual tendency during the nascent stages of the bull market that could last for the next two years or even up till 2025, given the appropriate conditions. But we need to be frank here; the interest displayed by institutional investors towards Bitcoin and Ethereum significantly exceeds the one shown to XRP.
Take Grayscale, for instance, the New York-based investing and asset management firm that reportedly has around $10 billion in cryptocurrency under management. The company has the XRP Trust that was established in January 2018. Right now, the total market value (AUM) of XRP amounts to $7,6 million (342,500 shares with 93.5 XRP/share). That is a minuscule sum compared to that held in the Ethereum Trust - $1,6 billion in 28,297,100 shares, not to mention the Bitcoin Trust (GBTC) with its huge AUM of $10 billion. A similar ratio can be seen across other major investment firms that have their focus on crypto, such as MicroStrategy and Galaxy Digital.
It comes to show that the aforementioned surge in whale addresses could be either an early signal that large players are finally turning their attention to XRP price charts, so traders should expect an even larger influx of capital into this market over the next three to five years as the XRP price realizes its upside potential to the fullest, while fund managers would be trying to balance out the portfolios - or it hints about the genuine lack of interest towards the coin for international remittances that would once again force the price of XRP in USD to lag severely behind the other two dominant cryptocurrencies.
XRP/USD price chart - 30 days
Nevertheless, it doesn’t change the fact that the XRP price is going to keep rising persistently throughout the next five years. Our XRP price prediction model dictates that in a span of one to five years, the value of the altcoin under review will undergo the following changes:
XRP Price Prediction Chart - 1 year
These gains might seem astronomical right now, especially since the market has taken only the first gasp of bullish air after years of downsloping. However, XRP has a trump card up its sleeve that neither BTC nor ETH have, and it’s called the Central Bank Digital Currency (CBDC).
The RippleNet, and the accompanying products like Paystring, were built to serve the needs of the contemporary banking system that currently suffers from a major crisis due to the COVID-19 pandemic, the weakening USD, the ballooning national debts, and a plethora of other factors. And given that China, the main economic competitor of the EU and the US, has been making headway in this regard (the digital yuan is said to be launched by the end of this year), the Western financial establishment would be seeking ways to expedite the process of CBDC introduction. But they would also require an edge over the Chinese counterparts to maintain the firm stance in the transforming financial framework. And that edge could be provided by Ripple as it would drastically improve the cost and the efficiency of global payments.
Basically, XRP has little to no competition in this particular area since most crypto projects are trying to distance themselves from banks and regulators, whereas Ripple seems to be tailor-made for the conventional financial institutions that want (and need) to undergo the reforms in order to stay relevant.
Ripple has been actively pushing its agenda among central banks, especially during the Ripple Swell Global events, stressing on such issues as interoperability and the creation of the Internet of Value that has CBDC as its integral part. In the next five years, the roll-out of digital currencies backed by central banks in collaboration with Ripple, though this partnership isn’t written in stone yet, could propel the price of XRP to the said heights, thus really confirming its status as the third most prominent cryptocurrency.
Naturally, the growth of XRP price in USD will be accompanied by the symmetrical increase of coin’s market capitalization, which, according to our calculations, will reach the $1 trillion benchmark by 2025.
Over the next five years, Ripple Labs would also have to resolve the regulatory issues, specifically with the US financial authorities that, according to Brad Garlinghouse, the CEO of Ripple, is putting the US blockchain companies at a serious disadvantage due to the uncertain and lax regulatory framework with regard to digital assets, namely XRP. To this day, the stance of the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) on XRP remains unclear, which hampers the growth of the Ripple ecosystem. So much so that the founders threatened to relocate the company headquarters to a more crypto-friendly jurisdiction. But we are sure that over the next five years, as governments come to realize the benefits that Ripple, and other blockchain projects, can bring to the table, the regulatory issues will be settled and XRP would get a chance to make a run to the designated price levels.
So, if you are asking whether XRP is a good investment for the next five years, we would answer affirmatively, but keep in mind that it might not be performing as bullishly as a host of other altcoins, especially compared to ETH and DeFi tokens, if that movement won’t repeat the fate of ICOs in 2017: a degradation after the hype had worn off.
To answer the question of what XRP will be worth in 10 years, we would have to have an idea how the global financial system will be organized in this relatively long time, but it surely won’t be the same as today. Banks have no other way but to evolve and embrace new tech solutions, one of which might well be RippleNet and XRP, for the reasons described above.
XRP Price Prediction Chart - 5 years
Our XRP price prediction for 2030 largely depends on the assumption that it would take approximately five years for the solution providers and regulators to settle their issues and arrive at a consensus and establish a mutually beneficial collaboration. Once it’s done and the full-scale adoption commences, the price of XRP is likely to surge to $50 per coin and possibly even $80, if the adoption rate turns out to be better than expected. Let’s also not forget that Ripple plans on holding an IPO that if carried out successfully, would have an immensely positive impact on the XRP price.
Certainly, there will be huge dumps in the roads to the said price levels, especially if Ripple Labs would be forced to dump their vast holdings of XRP (nearly 50 billion XRP held in an escrow and over 13% of outstanding supply locked on other accounts) onto the open market, but the overall forecast for the XRP price in 2025 and 2030 remains positively bullish.
After the recent show of strength by XRP, buying it on the nearest pullback would constitute a smart investment decision.
XRP represents the unique solution for cross-border payments and settlement that can be easily adopted by central banks, contrary to the vast majority of other cryptocurrencies.
In 2021, the price of XRP will reach $1.77.
In 2025, the price of XRP will stand at $24.
In ten years, XRP is likely to surpass $50 and aim for the $100 mark.
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