Bearish corrections are healthy for the organic growth of a financial asset.
The market is waiting for RLUSD, the new cryptocurrency that Ripple will launch.
XRP has performed more than 300% in the last 30 days and its price reached highs not seen since late 2017.
When it seemed that the cryptocurrency issued by Ripple Labs was on its way to surpassing its all-time high of $3.84, its price experienced a slight decline.
As seen in the following graph of TradingView, The price of the asset exceeded the line of $2.90 butthen fell to $2.30. Currently, its price is $2.40.
In this framework, the question arises: What happened to XRP so that its price does not continue to rise?
First of all, it must be clarified that no bullish trend is in a single direction, especially in an environment as volatile as the cryptocurrency market.
Even if XRP had continued its rise, a downward correction was expected. This is a price adjustment after a strong upward movement.
Likewise, it should be noted that these corrections help the market stabilize and are healthy for the growth of a financial asset. They allow new buyers to acquire a digital currency and investors to make profits. In that way, A sort of firmer floor or support is created for future upward movements.
As CriptoNoticias has explained, support is a level or price zone where a financial asset stabilizes or rebounds parabolically. The price does not usually fall further than that area because, for investors, Selling it below that level would be undervaluing it.
Bullish Outlook for XRP
The price of XRP is 40% from the ATH it reached in January 2018. However, There are some factors that could push its price to all-time highs such as, for example, the launch of RLUSD.
This is the Ripple stablecoin. In principle, the asset, which has a 1:1 parity with the US dollar, was going to be available on the market starting December 4, but its launch was finally postponed. Firm officials indicated that they continue to work with the New York Department of Financial Services (NYDFS) for final approval.
With RLUSD, Ripple will offer investors a safe haven asset that is not exposed to market fluctuations. Furthermore, another issue to take into account is that will be issued on the Ethereum and XRP Ledger network.
In that sense, it should be noted that if there is a greater volume of activity on the XRP Ledger, the demand for XRP to pay commissions will increase. This increase in cryptocurrency usage could act as a catalyst for the price of XRP.
Another factor that could boost the price of the asset is that there are currently four companies that have submitted applications to issue their XRP-based exchange-traded funds (ETFs). The firms that want to launch these financial products on the market are Canary Capital, Bitwise, WisdomTree and 21Shares.
If the next administration of the United States Securities and Exchange Commission (SEC) pushes for clear and friendly regulation of the cryptocurrency sector, it is possible that these applications will be approved.
As CriptoNoticias already explained, due to its operation, cash fund managers must acquire the asset, in this case it would be XRP, to back their actions. In this way, the quantity available on the market is reduced.
If these products are successful, firms will have to buy more XRP, which would cause an upward momentum in the price.