Ripple (XRP) Price Prediction for 2022: All Eyes on the SEC Case
Ripple (XRP) – Forecast Summary
|XRP Forecast: H1 2022|
Price drivers: Waning bullish crypto sentiment, Favorable result of SEC lawsuit
|XRP Forecast: 1 Year|
Price drivers: Ripple adoption, Listing back into popular DEXs/CEXs
|XRP Forecast: 3 Years|
Price drivers: Further regulation, more adoption from financial sector, Ripple IPO
2021 has been a tumultuous year for Ripple (XRP). On January 1, 2021, it began the year in sluggish mode, trading near the lows at $0.2375. Fast forward three months later – Ripple hit a new all-time high on April 14, reaching $1.9669, which was an amazing gain of 728% in just three months!
However, the journey of Ripple (XRP) has not been a straight line, as it has experienced tremendous volatility, along with the entire cryptocurrency market. Since hitting new all-time highs it has traded in a wide range, from the support level at $0.50, to the psychological resistance at $2.00. Then the momentum left, and was replaced with volatility and a bearish sentiment.
Throughout the year, RippleLabs has faced a lot of regulatory hurdles, headed by the lawsuit initiated by the United States Securities and Exchange Commission. Add to this the negative news that several exchanges were delisting the Ripple (XRP) cryptocurrency, including one of the biggest exchanges, Coinbase. All investor’s eyes are now fixed on the SEC lawsuit, and on how the judicial system will rule on this. The outcome could either make or break Ripple.
Recent Changes in the Ripple Price
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RippleLabs is the company behind the XRP coin. The company’s objective is to make international money transfers cheap and easy, in direct response to the slow and tedious process used for international money transfers globally.
They present XRP as the solution to overcome the way banks operate nowadays which can take a long time, due to the lengthy process it has to go through to get approved for an international transaction. Customers of banks who want to transfer funds from one country to another need to pay unnecessarily exorbitant fees for the transfer. These fees are collected by the banks and other intermediaries required to implement these international transfers. Sometimes, currency conversions have large spreads as well, which means the customer is left with so much less monetary value when the money transfer arrives on the other side. Furthermore, you also need to check whether a particular country is or is not supported by your local bank, and if it is not, you cannot transfer funds to that country. The current international banking model is simply too slow and too troublesome for the common folk.
RippleLabs created XRP and RippleNet to help ease this sore point. They boast that Ripplenet is cheaper and faster than the slow banking of today. At the same time, it is compliant with the anti-money laundering laws and regulations, and it can even detect fraud. This innovation has encouraged investors and several banks to support the endeavor. Popular financial institutions that have partnered with RippleLabs include: American Express, the Bank of America, Santander bank, TransferGo, and Xendpay.
RippleLabs also created the cryptocurrency Ripple (XRP), which is based on the blockchain. You can transfer XRP in less than 10 seconds, with fees of just $0.0002, which is vastly cheaper than what banks are charging for international transactions. And since it is in the blockchain, there are no limitations when it comes to your location. You can trade XRP anywhere in the world, as long as you have an internet connection.
XRP is currently the 8th largest cryptocurrency in terms of market capitalization. At the time of writing, it had a market cap of $39,436,190,028 USD, a circulating supply of 47,535,964,473 XRP coins and a maximum supply of 100,000,000,000 XRP coins.
Ripple Price Prediction for the Next 3 Years
More Adoption by the Traditional Financial Sector
The innovative technology offered by RippleLabs has indeed proven to be a game-changer for the traditional financial sector. The adoption of the blockchain technology by banks and financial institutions will be the primary driver of Ripple (XRP). Currently, several money transfer services and banks have been using or trying out XRapid as an alternative to SWIFT. High profile companies like Xendpay, American Express, WesternUnion, Transpaygo, Euro Exim Bank, Bank of America, and TransferGo have partnered with, or at least tried, this faster and cheaper way of doing international transfers.
Further regulation and clarity, when it comes to laws, could help further adoption of Ripple (XRP) by the traditional financial sector. As more and more financial institutions understand the regulatory environment, they will begin to realize how much money they can save by adopting the technology. More adoption means higher demand coming into the market, which will inevitably drive the price of XRP higher.
SEC lawsuit coming to an end, Ripple IPO
Arguably the most important price driver for Ripple (XRP) is the impending end of the US Securities and Exchange Commission’s lawsuit. I believe a favorable outcome would drive prices to all-time highs, while a negative one would force the price into a nosedive to new lows.
In the lawsuit filed in December 2020, the SEO insists that Ripple (XRP) is a security and not a currency. The SEC accused Ripple of selling securities in the amount of $1.3 billion. For context, a security refers to a company’s stock, or a bond, unlike the US Dollar which is a currency. The same SEC approved major cryptos Bitcoin (BTC) and Ethereum (ETH) as currencies and not securities, which makes the lawsuit rather questionable to say the least.
Politics may be part of the reason why this happened to Ripple (XRP). Too much innovation and adoption may have caused it, as a lot of money would be lost if most financial institutions used XRP for their international transactions. Nonetheless, the SEC lawsuit will be coming to an end, probably in about mid-2022. Ripple CEO, Brad Garlinghouse, expressed the company’s desire to do an IPO in the traditional equity markets, when the lawsuit is finally over, and this would definitely drive more demand for XRP.
XRP/USDT – A Technical Analysis: Major Uptrend Line Intact, Despite Recent Bearish Price Action
XRP/USDT – Weekly timeframe: Major Uptrend Line Intact
The weekly timeframe log chart for XRP/USDT shows that the recent weakness in the price action is still within the range of its long-term uptrend line. This uptrend line began in early 2020, when the price hit a low of $0.1013, and since then it has never returned to this price level, as it began stepping upwards towards new all-time highs in May 2021, almost hitting $2.00. As long as XRP/USDT does not fall below this major uptrend line, long-term holders can hang on, as there is no major technical reason to sell yet.
Daily Timeframe shows short-term bearishness
On the other hand, the shorter daily timeframe of XRP/USDT presents a rather bearish picture in the mid to short term. The infamous bearish technical indicator, the Death Cross, has formed as the 50-day moving average (gray line) has crossed below the long-term 200-day moving average (purple line). Furthermore, price action failed to rise above the 200-day moving average (purple line) signifying more weakness. It is currently at the support level of a pennant pattern, which started forming in May 2021, and a fall from this level could mean XRP/USDT falling to it’s immediate support level of 0.50-0.51.
The more positive situation for XRP/USDT would be a recovery from the current price levels, with further consolidation and full tightening, to form a pennant, and finally a breakout above the coil. The pennant pattern consolidation will converge into a pivot point by mid-2022, which, coincidentally, is also the projected time at which the SEC lawsuit will come to an end. This could either make or break XRP/USDT, depending on whether the ruling goes their way or not.
As a trader and investor, I would suggest staying on the sidelines and waiting for further confirmation before entering XRP/USDT. The overall cryptocurrency market sentiment is shaky and unfavorable at the moment, and in the near future, there will be more headwind, led by the SEC lawsuit. Once things clear up and more information is presented for RippleLabs, that’s the time to take positions. In the meantime, we will simply wait and watch.