Ripple/XRP Market Update: Will Support Hold?
Casual as well as serious investors who follow Ripple have plenty of news to catch up on this week. Not only has there been relevant price action for XRP, but a new U.S. government ruling is set to have a significant impact on the entire economic environment for the popular cyber-currency. Here’s a quick look at the general scenario for Ripple’s coin, the latest price movements and an important legal issue that could change things for anyone with a stake in the crypto-currency issued by Ripple.
Overview of Current Situation
XRP is a kind of crypto-currency that operates in a different way than some of the most popular coins in existence, Bitcoin being the king of the genre right now. This version isn’t based on block-chain technology and you can’t mine it or create more of it. In fact, the original issue of XRP was 100 billion coins. That will never change.
The coin’s big selling point is that it can be exchanged for any other cyber-currency instantaneously. That’s why so many banks use it as a medium of exchange rather than as a crypto in and of itself. Payment networks use it as well due to its settlement speed. Economists view it as more of a bridge currency rather than a de facto crypto. Regardless, it has become an investment vehicle for increasing numbers of people who are interested in trading Ripple’s XRP token.
Here are some of the most important developments of the past week:
- Current pricing trends are bearish, with mounting downward pressure on the $.20 support level that has been in place for a while.
- Investors are looking to the 50-day moving average of $.20 as a breaking point for the week to come. If the price goes lower than that, there could be a free fall of sorts in the making.
- Consensus of economists who track the coin is that the $.20 support will hold for the near term.
Weekly and Monthly Trends
It’s been a wild ride for the coin’s holders since mid-September. Prices have fluctuated between $.30 and $.18 during that time, currently sitting slightly above that $.228 point. The price of Ripple typically moves in tandem with its big brother, Bitcoin, but most experts don’t expect that relationship to continue for long. The most recent high of $.30 was hit on November 5, but since then the bear market pressure in the cryptocurrency market has forced the coin down to the low-twenties, where it sits today, in early January, 2020.
Long-Term Challenges for XRP
The U.S. Commodity Futures Trading Commission (CFTC) regulates all cyber currencies that fall under the category of commodities. Recently, the head of the CFTC pointed out that XRP is in a sort of limbo because its issuer, Ripple Company, is considered to have sold the coin as a security, not as a commodity. The highly complex lawsuit at the base of this controversy means that Ripple might soon be classified as securities, just like stocks, and be regulated as such. That could mean wild price fluctuations in the next few months.