Ripple records share price growth in the high double-digit percentage range. Several factors could be responsible for the increase. We give the possible reasons and give an outlook into the near future.
For over a year now, Ripple has been bouncing off the almost insurmountable resistance at USD 0.30. At the end of this week, the bulls were finally able to gain sustainable control and XRP started a price rally. The price of the third-largest cryptocurrency in terms of market capitalization rose by 88 percent to a new high for the year. Long-term investors in particular were rewarded for their endurance. At present, the price is trading around USD 0.45 in the new resistance zone. These are the possible reasons for the sudden rise in the price.
Ripple ends negative phase and starts a bull run
This year there were some exciting topics in the crypto world. But apart from the DeFi hype and the price increases of Bitcoin (BTC) and Ether (ETH) there was no place for Ripple so far. In general the “cryptocurrency for banks” seemed to have big problems to tie up to old successes. For more than a year, each attempt bounced off the resistance zone at around 0.30 US dollars. Again and again, the bears took over and sent XRP on a downward spiral. This week, however, history should not repeat itself. The initial rate of US$0.26 on Monday peaked at over US$0.49 on Saturday. Reason enough to analyze the reasons for the sudden rise and examine possible scenarios for the future performance of the share price.
Ripple’s price rally – These are the possible reasons
The Ripple Foundation has always had to put up with questions about its own approach. The strong partnerships have resulted in only modest use of the products developed, and through the regular sale of its own XRP, sales pressure in the market is home-grown. The organization behind Ripple still holds 55 percent of all XRP itself and sells them on the market on its own account. The sale of tokens is one of the Foundation’s main sources of income. But the criticism has not gone unheard. In the current quarterly report, it was announced that the Ripple Foundation would like to buy XRP in large quantities again in the future. Although the company is still selling significantly more XRP than the new one being bought, the approach shows that the share price should be supported in the future.
The Ripple Foundation’s buy-back program is reminiscent of a familiar procedure from the traditional financial markets. Listed companies often buy back their own shares on the market through their managers if they believe in the success of their own strategy. The company behind Ripple would undoubtedly be a financially strong market participant who would have a great interest in the share price increase. But the announcement is not the only reason why investors are putting new confidence in the XRP price. The upcoming Airdrop of the Spark Token could also be a possible reason. XRP hodlers must place their tokens on certain wallets or exchanges by 12 December 2020. This entitles them to be considered for the upcoming Airdrop.
However, the bullish signal is the momentum in the market. Both the lead currency Bitcoin and almost the entire Altcoin market are on the rise. According to the “Fear and Greed Index”, extreme greed prevails among market participants. The value of 94 is hovering near its maximum and the FOMO could attract more and more investors. As the third-largest cryptocurrency, Ripple has a certain level of recognition. Many investors already know XRP from the legendary Bullrun from 2017.
How might the course develop in the near future?
Ripple often has the problem that after a rise in the share price, the price quickly enters a correction phase. But in the meantime, the parameters have changed somewhat. In addition to the momentum, the Ripple Foundation’s approach could also have a significant influence on the share price. The analyses of many experts expect a further rise in the share price. The most frequently mentioned bullish scenario describes a rise to USD 0.55. The Ripple Foundation will also soon publish the new XUMM payment and banking platform. However, although the current headlines around Ripple are positive, they are not alone a strong buy signal. Rather, XRP, as an established cryptocurrency, is likely to become a popular trading destination for investors alongside the momentum and extreme greed in the market.
Summary: Ripple could continue to rise
After an extremely successful week for Ripple, questions arise about the further course of XRP. The share price rose by over 88 percent at its peak this week, after breaking through an important resistance. The current positive sentiment in the market in particular is likely to have been a significant price driver. The share price is currently in a phase in which future development depends on many factors. Should the bulls also succeed in breaking through the current resistance, a further rise in the price of Ripple is very likely.