Mid May Update: Technicals
XRPUSD daily chart shows a clear behaviour pattern for months now – XRP is ranging in a horizontal channel, bouncing up and down from $0.29 to $0.36 levels. It is easy to conclude that there is not enough power behind its moves upwards to rocket past the $0.36 resistance but also the $0.29 zone is a strong defense line.
The weekly XRPUSD chart, however, reveals a dreary scenario in the making – there is one giant descending triangle forming and XRP is right on the edge of it, about to move up or down. And the vertex of that triangle is reached, so it is a do or die for XRP, again.
The descending triangle is a bearish formation that usually forms during a downtrend as a continuation pattern. There are instances when descending triangles form as reversal patterns at the end of an uptrend, but they are typically continuation patterns.
Considering that market is completely focused on bitcoin’s fight with the newly reached heights, altcoins are rotting on the racks and waiting for their season to commence. While that wait goes on, XRP and other altcoins slowly lose value to BTC and go back to their all time lows. Entering XRP right now would be too risky and you should at least wait for this descending triangle to play out before deciding on your entry point.
Our approach in situations similar to this one, would be a tiered entry position, where you buy a chunk at these prices and set other buy bids right above the significant support lines.
This XRP levitation around this area is going on for weeks now and holding a long position on XRP is very risky endeavor. Shorting it would be less risky but the probably the best option would be to be out of XRP altogether until we some indication where it goes next.
worse, as XRP is about to give away all the gains it made against bitcoin in the last year or so. The price keeps stumbling towards the support zone at 4200 satoshis, price XRP had last time in September 2018. XRP went to reach 11k satoshis in one moment and it was all downhill from there.
On even shorter time frames, like 1H, the struggle of XRP against BTC is palpable – it tried rising yesterday but got dunked on on the EMA50 line. We are now waiting if it is going to form a double bottom on the 4300 sats zone and throw another swing up to the EMA50 at 4500 sats or even EMA200 at 4850 satoshis should the volume pick up.
One thing to bear in mind is the turbulent and erratic nature of bitcoin – a sudden thrust up or slide down is always on the cards which would invalidate this and all other analysis and predictions. In such cases, market is shaken up with most traders exiting altcoins and entering bitcoin positions, especially in the initial phases of bitcoin pumps. So it is always good idea to keep a close eye on bitcoin’s behaviour before opening a long or a short on any other coin in the market.
Should this happen, stop by again to check out our updated charts and thoughts.
The indecisiveness of bitcoin and its wobbliness on the newly acquired heights might keep the whole market in a cramp for undetermined time period so XRP will probably slowly lose value and spiral downwards to the 4200 sats zone. Considering this is essentially a local bottom for XRP (lowest price in BTC since September 2018, before that XRP was this low in December 2017) and catching an ultimate bottom is a fool’s game, this presents a good buying opportunity for a short term profit on XRP.
XRP is down 1% in USD on the week and 11% down on BTC in the same time-frame. What is worrisome is that XRP is down 42% on BTC for the year and it is one of the rare top coins that is down for the year measured in USD as well – it is down 14% while BTC is up 59% and ETH is up 26%.
Trading volumes are looking good: reported volume in the last 24 hours was $919m and “Real 10” volume was $38m. So, the reported volume is 24x larger than the “Real 10” volume (trading volume on the exchanges that prevent wash trading). This means that XRP’s liquidity is massively inflated which is pretty much the case with the vast majority of coins.
Moreover, XRP comparatively has a weak buy support, according to coinmarketbook.cc. Buy support is measuring sum of buy orders at 10% distance from the highest bid price. This way we can eliminate fake buy walls and whale manipulation and see the real interest of the market in a certain coin. XRP currently has $20.9 million of buy orders measured with this method, which sets XRP buy support/market cap ratio at 0.17% which is a very low ratio among the bluechip coins. Bitcoin and Ethereum have a 0.27% and 0.28% ratios, respectively. This novel metric indicates there are a lot of manipulations, inflated liquidity and fake orders on XRP trading pairs.
XRP’s market sentiment score, measured by the market analytics firm Predicoin, paints a neutral picture.
Predicoin wraps its analysis up into a single simple indicator known as the SentScore, which is formed from the combination of five different verticals: news, social media, buzz, technical analysis and fundamentals.
XRP currently has a Sentscore of 4.7 which is defined as “the neutral zone”. You can see that Reddit buzz has back to average level after a dip in the middle of the month with Twitter activity regarding XRP decreasing marginally. Search volume on search engines has picked up, with a noticeable peak in the beginning of the second week of April.
Overall, Predicoin’s Sentscore is an excellent indicator of community interest and can provide useful insight into which coins are trending right now.
Mid May Update: Fundamentals
To assess fundamental health of a project, we used the FCAS metric. FCAS is a comparative metric whose score is derived from the interactivity between primary project lifecycle fundamentals: User Activity, Developer Behavior, and Market Maturity.
There are a few sub components which provide data to each fundamental:
User Activity is comprised of Project Utilization and Network Activity
Developer Behavior is comprised of Code Changes, Code Improvement and Community Involvement
Market Maturity is comprised of Liquidity and Market Risk. Market Maturity has less than 5% impact on a project’s overall FCAS.
FCAS ratings are on a 0-1000 point scale with a corresponding letter grade. Break points are based on standard deviations in the underlying component distributions.
900 – 1000 is marked as S for superb. 750 – 899 is marked as A for attractive. 650 – 749 is marked as B for basic. 500 – 649 is marked as C for caution. And finally, below 500 is marked as fragile. You can read more about it here.
XRP has been ranked as the A category – attractive with overall 771 points as of May 9th. By far the strongest metric that contributed to this great score is developer activity that got 825 points, followed by user activity with 730 and market maturity that had 654 points. For comparison, BTC has the same A mark but with 861 overall points while Ethereum is highest ranked as S (superb) with 925 points.
Below are some of the most important news around the project in the last 30 days.
- Ripple executive Marjan Delattine confirmed that 10 financial institutions are actively using XRP and that “the volume is increasing every day”.
- eToroX adds 3 pairs for XRP, 2 of which are XRP based.
- Coil, the San Francisco-based startup founded by former Ripple CTO Stefan Thomas, just opened the public beta on its blogging platform designed to help scribes earn XRP.
- At the Financial Sector Conference on April 24, Saudi British Bank (SABB) announced the launch of its Instant Cross-Border Transfer Service, a payments infrastructure based on the Ripple blockchain network that utilizes crypto asset XRP for liquidity. With nearly $50 billion in assets, SABB initially joined the Ripple network in January 2018 with the support of the Saudi Arabian Monetary Authority (SAMA) to use emerging technology in the blockchain to process payments.
- Stock exchange operator Nasdaq has added yet another cryptocurrency index – this time for the XRP.
- According to The Block’s research, Ripple has cumulatively sold $890 million of XRP out of which 34.4% was sold to the exchanges and 65.6% was sold to the institutions. Ripple sold $169.42 million in XRP in the Q1 2019, which is the highest quarterly sum that Ripple has ever sold. The second highest amount of XRP was sold by Ripple in Q1 2018.source
- At the recent Euronet conference call, Michael J. Brown, Chairman, CEO and President, announced to the world, yet another partnership that will excite the Ripple ecosystem. The partnership is between Ria Financial Services and Ripple.
- According to Ripple CEO, Ripple signs 3 production contracts per week in Q1/2019. Source
- Ripple-backed XRPL Labs released XRPayments on Playstore and App store twitter.com
- Rakuten Bank listed XRP on their platform which introduces millions to XRP.
- U.K. based RationalFX, boasting over 180,000 registered clients, announced partnership with Ripple for international payments.
Below is our long-term forecast where we cover general market movements and sentiment shifts before delving deeper into the specific predictions for XRP.
This year the company Ripple and its crypto currency XRP had a lot going on: The violent crash in 2018 brought worry lines on the forehead of followers and investors. From more than three dollars per coin in the meantime, it went down to below 0.30 USD by December.
However, the crypto currency recovered in December 2018 and numerous new partnerships and projects were concluded. Where is the journey going in 2019? The XRP forecast looks promising. But is 500 US dollars per coin really possible? The forecast.
General Market Movements and Sentiment Shift
The downfall of altcoins that were mainstream media darlings at the start of the year, XRP among them, can be attributed, in part, to novice investors getting scared off once the bear market kicked in with a vengeance. Every resurgence of bitcoin in recent period, was met with the, for the most part, inability of altcoins to rally with it. Reason for that can be rookie investors learning from their mistakes, while smart money that was previously watching from the sidelines has begun to enter into bitcoin.
These entities weren’t about to buy BTC when it was trading at an all-time high, but they’ll take a look now, having missed the boat the first time around. None of them, it seems, are interested in altcoins however, despite the fact that many are trading at a 5x discount. Institutional investors may be cautious, but they’re not foolish.
Some altcoins will continue to have some speculative value for the foreseeable future. But just like the now infamous tulips, the hysteria will eventually subside. We are already witnessing the first phases of that slide and even though most of the bag holders react emotionally to articles that criticize their coins, I am just observing the developments on the market. You better start emotionally detaching yourself from your “great sounding” coin because if goes nowhere, ideas are worthless without execution and real users that see value in the project.
Our XRP Price Prediction for 2019
XRP, as the rest of the market, is tied at the hip of bitcoin’s price action. If bitcoin embarks on another bull run, XRP can hope for one as well. Since that is very unlikely, don’t expect much to change for XRP price-wise in this year. So 2019 will be a year of boring sideways action with minor bitcoin ignited jumps and slumps.
The main currency in cryptocurrency markets is Bitcoin and given this, altcoins tend to fuel Bitcoin runs and Bitcoin tends to do the same in return. Given this relationship, Bitcoin price movements (or lack thereof) tend to effect altcoin prices.
When Bitcoin goes up swiftly, it will likely:
- Suppress or depress altcoins as money flows into Bitcoin;
- Or, take altcoins along for the ride
In cases when Bitcoin plunges, it will likely:
- Depress altcoins as money flows into fiat;
- Or, cause altcoins to boom as money flows into them, but this is rarely the case.
When Bitcoin moves sideways, it will likely:
- Cause altcoins to mimic that as traders wait for a clear sign on the direction of the market;
- Or, cause altcoins to flourish as traders look for returns in altcoins and try to get favorable trades in terms of BTC pairs.
To summarize, Bitcoin is the focal point of the crypto market in many ways, and with BTC trading pairs on every exchange, the gravity of Bitcoin is hard to evade.
The majority of projects will fail — some startups are created just to gather funds and disappear, some would not handle the competition, but most are just ideas that look good on paper, but in reality, are useless for the market.
Vitalik Buterin, co-founder of Ethereum said:
“There are some good ideas, there are a lot of very bad ideas, and there are a lot of very, very bad ideas, and quite a few scams as well”
Usage of XRP ledger has decreased in the last year, from the peak it had back in January of 2018 when it exceeded 1 million transactions per day. Right now, that number is much lower, hovering from 350k to 800k.
Ripple Status Quo
The bank crypto currency – so called because the company cooperates with many international banks and payment service providers to build a global payment network – is often scorned in the crypto scene. Many supporters of other currencies such as Bitcoin, Monero, Dash or Ethereum do not like the crypto currency around CEO Brad Garlinghouse because it relies on the banks.
Many other cryptos want to make exactly these banks superfluous and create decentralization. CEO Brad Garlinghouse’s company, on the other hand, uses its technology to offer payment services that enable money to be transferred to other countries and currencies within seconds. And that at 40 to 70 percent lower costs.
It has often been written that XRP performed significantly worse than all other top currencies in 2018. But that’s not true. If you look at charts, you can see that the XRP behaved exactly like the entire market has.
That is not particularly good now, but also by no means bad. One cannot say thus that the bank crypto currency performed worse, than the competition. But what are the forecasts for the coming year?
Currently XRP price is in a range of 0,30 USD and 0,40 USD. Only if it breaks out sustainably can it move back towards the 1 dollar mark. Or at least if you follow the charts. One looks at the chart – the development of the price over the last few months and years – and receives important signals from an analysis.
The forecast for the coming years
There are numerous sites that have predicted potential future price targets. The truth is: No one can really know. You can only get close to a goal by good arguments and numbers.
The experts of investinghaven.com expect that the coin can rise up to 20 dollars within one year. That sounds better. But what arguments can they put forward?
Thus the authors say that the XRP gains in value, because one can settle thereby world-wide payments in the future. Every year, about 30 billion US dollars would only be incurred in fees for international transfers and currency exchanges. The Ripples system could save about $16.5 billion. And it would do so every year.
The company is also planning another application called Xpring. This will allow even more people to work on the blockchain and use the coin. Goods will also be developed and traded on the Blockchain. The authors attach great importance to this and think that the bank crypto currency will become the number one in its field, similar to the large platform companies Facebook, Amazon and Google.
And this platform or network effect is likely to cause further increases in forecasts for the crypto currency. These platforms function according to one principle: The winner takes it all.
The experts thus arrive at a forecast of 20 USD. In support of this, they take the long-term chart. If this is continued into the future, an XRP coin could actually cost USD 20 next year.
Further reasons for a positive forecast
Together with its partner American Express, the company has succeeded in gaining a foothold in the Chinese market. American Express is allowed to settle in the Chinese currency Yuan and thus the XRP is likely to be used for currency exchange. This step was very important, because China is a gigantic market and is already paying a lot electronically.
CEO Brad Garlinghouse and his product manager Craig DeWitt were very enthusiastic about this step and the entry into the Chinese market. China is expected to have about ten billion credit cards in circulation by 2020. This will result in an enormous payment volume and thus a positive forecast.
Another reason is that there is no XRP mining. All about 100 billion XRP that will ever exist have already been created. That tightens the supply and causes rising prices sooner or later.
In addition, payments must be paid with 0.00001 XRP fees which are burnt, so the amount of circulating coins slowly but surely decreases. This won’t have a huge effect over the next few years, but in the long run, these circumstances should not be ignored.
Also important are the partnerships with the banks Santander and UBS, as well as the credit card provider American Express. Through these already existing cooperations, further companies should become aware of the bank crypto currency, which will lead to a further positive XRP forecast.
The Bill and Melinda Gates Foundation is already using the company’s blockchain technology. Millions of people in the third world will be able to have a bank account on their smartphone and get a digital loan. The companies Visa, Amazon and Google could also be interested in working together.
Because these companies worldwide are turning over billions of dollars, but the money sometimes takes up to five days to get to the right account. With blockchain technology and XRP, this should be much faster and cheaper.
Ripple and XRP in 2020
Let’s look a year further and venture a forecast for the future. After Ripple 2018 didn’t go particularly well and the year ended with a minus of about 60 percent, the question arises what will happen in the coming years. There should not be another XRP crash. The currency’s intrinsic value is too high. But what seems realistic now?
We have already seen a few forecasts and also reasons for a positive outlook. In 2020, the value of the XRP should continue to rise significantly, because many experts see 2019 as the year of fate for most crypto currencies. Only those who have an application case in the real world are likely to survive in the long term.
After all, numerous coins exist only because someone wanted to earn money through an Initial Coin Offering (ICO) – an IPO of a crypto currency, for example – or because the coin is supposed to be a store of value like the Bitcoin. But there is no need for 2000 stores of value. So it should now be sorted out, which means that there will only be a few hundred crypto currencies left.
These should then rise in price because they have shown that you need them and their blockchain. One of them is always the XRP, which is why the XRP ple forecast for 2020 looks very good. There are no concrete price targets here. But if things go well next year, the XRP coin is likely to exceed $20 in the following year.
What does the final forecast look like? Basically, no one can say exactly where the coin is going. However, it seems that there are many more positive opinions than negative ones. The bank crypto currency has many applications and is used by many international companies.
These partnerships are likely to become even more numerous in the future and the coin will come into circulation even more. Due to the platform and network effects, the price should be forecast higher than today. Forecasts are always difficult, but chart technically possible.
For the coming years there are forecasts up to more than 20 US dollars and even 500 US dollars are proclaimed from time to time. That seems to be a bit too high again, but the XRP could gain up to $100. Then it would have a similarly high market capitalization as gold. Why shouldn’t that be possible?