Transactions executing on Ripple’s On-Demand Liquidity [ODL] platform, previously known as xRapid, is on the rise. The fourth quarter continued to exhibit positive metrics for the XRP ecosystem despite the market’s bearish price momentum. In the latest development, XRP enthusiast, H_M_X revealed that transactions on the MXN corridor amounted to over $100 million out of the total $108 million ODL flow in the fourth quarter.
Source: Twitter | H_M_X
According to the above chart posted by H_M_X, there has been a three-fold increase in ODL flow in the latest quarter [that still has 20 more days to go] as compared to the third quarter which recorded nearly $33 million.
Source: Utility Scan
Data from Utility Scan also suggested an increase in USD volume per corridor in the last 24-hours. The above chart depicted a significant increase in activity in the MXN
Despite the Mexican corridor dominating the charts, Ripple’s Philippines corridor has also noted an uptick in ODL transactions. Interestingly, liquidity Index also noted a spike in the liquidity for PHP/XRP corridor.
ODL utilizes XRP as a bridge asset between multiple support currencies, thus eliminating the need for the traditional Nostro-Vostro accounts. XRP market volume on Bitso recorded significant uptrends, but CoinsPh managed to outpace Bitso recently. H_M_X also spotted the largest ODL transaction conducted on CoinsPh, which clocked 250,000 XRP. According to the XRP proponent, the value was achieved at a rate faster than on Bitso.
XRP could breach below channel to $0.20 before February
XRP increased in value from $0.184 to $0.245 in the days between 2nd and 12th of January, marking a whopping ~33% increase in value over less than two weeks. The coin dropped in value since then, to around $0.22 at the time of writing, and could dip further down in the weeks to come. CoinMarketCap data showed XRP currently has a market capitalization of over $9.8 billion, with nearly $2.3 billion worth of XRP traded in the last 24 hours.
XRP 4-hour chart
Source: XRPUSD on TradingView
The 4-hour chart showed XRP in an ascending channel formation, which it looked to have entered early on in the month. The volume could be seen spiking as the price approached the trend lines; however, the price’s failure to move all the way to the upper trend line after the third touch could suggest a weakness in the pattern and might indicate a more bearish market sentiment.
The 50-moving average was seen creeping up along the pattern’s lower trend line, well under the price candles, which is usually a bullish signal. However, the Relative Strength Index (RSI) indicator displayed a
In this scenario, XRP will likely move into the region between the support at $0.22, and the 23.6% Fibonacci retracement line at $0.227 in preparation for a downward-facing breakout.
Source: XRPUSD on TradingView
The On-Balance Volume indicator, a running total of an asset’s trading volume, looked to be dropping since January 14, and could be retracing its movement from just a week prior. The reducing trade volume could mean some sideways movement for XRP until it moves into the breakout region.
From there, XRP is likely to break down to at least the 0% Fibonacci retracement line at $0.20 before the month is up, and could possibly dip further down to the $0.183 support in the weeks following.
XRP is likely to experience some sideways movement on the 4-hour chart until it enters the breakout region between $0.22 and $0.227. From here, XRP will probably break downward and could drop to at least $0.20 before February arrives.
Not BTC or XRP – Digital Asset of the Decade Will Be Ethereum (ETH), Says Cryptocurrency Analyst
CryptoWolf, a widely-followed cryptocurrency market analyst, argues that Ethereum (ETH) will be the best-performing digital asset of this decade.
The professional trader is sharing a chart that compares Bitcoin (BTC) with Ether with his 20,000+ followers, while noting he believes it “must not be ignored.”
Like all cryptocurrencies, the success of Ethereum is far from a sure thing.
Scalability will most likely be a key factor that drives adoption rates for the second-largest cryptocurrency by market cap. Developers are pushing to boost the blockchain’s maximum number of transactions per second far beyond its current limit of 15.
Weiss Crypto Ratings says Ethereum’s long-term success hangs in
“Chronic congestion on the Ethereum network shows worldwide adoption, most important factor in long-term success of any crypto. However, if nothing changes, ETH users will start looking for alternatives. That’s why ETH 2.0 is necessary for Ethereum to move forward.”
ConsenSys, a New York-based organization supporting Ethereum development, says 2020 “will see Ethereum 2.0 come to life.” The developers of the leading platform for building decentralized applications are working on a major system-wide update, ETH 2.0, which should significantly improve the performance of the Ethereum blockchain.
“The march towards Ethereum 2.0 is proceeding at a rapid clip. Proof of Stake Ethereum exists. It’s alive! 2020 will see Ethereum move stridently beyond Phase 0 of Ethereum 2.0, onto Phase 1 and the launch of shard chains. Then, it’s game on.”
New evidence suggests that XRP could be deemed a security
A document resurfaced on the internet providing concise evidence that Ripple created XRP and that the firm is selling the token in excess of need for profit.
The lawsuit against Ripple
On Aug. 5, 2019, a new complaint was filed against Ripple. The filing argues that the firm’s tokens are unregistered securities under the U.S. Securities and Exchange Commission’s framework.
The lawsuit also claims that the distributed ledger startup broke a number of laws in the state of California. Ripple allegedly “blurred differences between Ripple’s enterprise solutions and XRP to further drive demand,” and “paid exchanges to list XRP, limiting the supply of XRP to drive demand.”
Now, evidence resurfaced supporting the argument that Ripple was the main entity behind the development of XRP. Additionally, the data suggests that the company and its members are selling this cryptocurrency for the purpose of enriching themselves.
The SEC’s arguments
William Hinman, Director of the Division of Corporation Finance of the SEC, believes that there are different elements to determine if a digital asset is a security. The principal factor is whether a “third party drives the expectation of a return” and if the funds are used to “increase the value of the enterprise.”
“Has the promoter raised an amount of funds in excess of what may be needed to establish a functional network, and, if so, has it indicated how those funds may be used to support the value of the tokens or to increase the value of the enterprise? Does the promoter continue to expend funds from proceeds or operations to enhance the functionality and/or value of the system within which the tokens operate?”
Based on Hinman’s perspective, it seems like XRP meets all the characteristics to be deemed a security. Ripple’s business model relies on selling cross-border payment solutions to banks and money transfer providers. The majority of their revenues are generated through the sales of XRP on public market exchanges and private financial institutions with the purpose of increasing the value of the company and for personal gain.
Evidence suggests XRP is a security
In 2018, David Schwartz, Ripple’s CTO, admitted that the firm’s main source of revenue is the sale of XRP and that these funds are used to increase the value of Ripple.
“A million dollars worth of XRP will
Schwartz also revealed that Ripple holds the majority of the total supply of XRP and acknowledged that selling software to institutions will not produce as many revenues as a small increase in the token’s price.
“Ripple will almost certainly be the largest holder of XRP for the foreseeable future. For every penny the price of XRP goes up, the notional value of Ripple’s XRP goes up by six hundred million dollars… Ripple makes money by selling software to banks. But how many banks do you think Ripple would have to close to make six hundred million dollars in license/support fees? That would equal the value of a sustained one cent increase in the price of XRP.”
Even if there is no use case for XRP, Schwartz affirmed that Ripple integrated this token into different products, such as XRapid, to increase demand for it and increase the value of the firm’s holdings.
“The reason we’re doing this is to increase demand for XRP to increase the value we can extract from our stash of XRP.”
The exponential price appreciation that XRP experienced over the last few years, has indeed helped the Ripple team increase the value of their “stash.” Co-founder Jed McCaleb, who is no longer at Ripple, alone reportedly sells half a million XRP on a daily basis, according to a Bloomberg report. Meanwhile, David Schwartz sold 2.8 million XRP worth roughly $810,000 in 2019 and Brad Garlinghouse, Ripple’s CEO, appears to have sold 23 million XRP in 2017.
With all of these factors in mind, investors must keep a precautionary approach to XRP. It is important to consider Ripple’s business model, team, and product to decide whether the firm acts in XRP holders’ best interests before investing in this cryptocurrency. Only time will tell whether XRP will be deemed a security by the U.S. Securities and Exchange Commission.