Ripple (XRP), the payment token launched way back in 2012, has been one of the altcoin space’s golden eggs in recent months.
Sentiment was riding high through September on the back of positive news coming out of its long-running, bitter spat with the US Securities and Exchange Commission.
“XRP is legit a security!” said SEC head Gary Gensler (I’m paraphrasing), so he took developer Ripple Labs to court.
Easier said than done and two years later, rumour has it that Ripple Labs is on the cusp of victory.
We won’t know the outcome to that dispute for a while, but what we do know is that the crypto markets are fueled by hype and speculation, not logic.
As such, Ripple has been making waves.
In the month of September, XRP rose by 50%, from US$0.32 to US$0.48.
By comparison, ether (ETH) fell 14% and bitcoin (BTC), while reasonably buoyant, ultimately dropped by a couple of percentage points too. The crypto markets as a whole dipped by 4%.
But it looks like US$0.5 is the point of resistance for XRP; while it stayed above that psychological barrier for most of Sunday October 9, the following days were harsh.
On Monday, XRP dipped over 7%, and losses have continued throughout the week, barring minimal support on Wednesday.
Boom and bust? Ripple (XRP)’s rally hits a wall of resistance – Source: currency.com
The US$0.50 point likely triggered a mass sell off as a SEC-related hype was met with a popular point of bearish resistance.
XRP did dip and recover in the tail-end of September, so it could happen again- some bullish support is indeed being witnessed on the four-hour candlestick at the time of writing.
A green candlestick is forming on the four-hour price chart – Source: currency.com
But the real challenge will be for XRP to sustain itself above US$0.50 for any substantial amount of time without a fundamental catalyst to support it, given the two rejections experienced at that level in the past few weeks.
“We’ll have an answer in the first half of next year,” Ripple Labs chief executive officer Brad Garlinghouse said yesterday in regards to the SEC lawsuit.
That probably won’t cut cut.
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