Ripple’s native token XRP was among the best performers in the cryptocurrency space even as its delisting across exchanges picked momentum.
The XRP/USD exchange rate surged by more than 40 percent on a 24-hour adjusted timeframe, hitting an intraday high of $0.328. Measured from its bottom of $0.17 from December 30, the pair was trading almost 94 percent higher, signaling a successful pullback following its 82 percent crash from its yearly peak of $0.92.
Ripple rebounds with moderate volume. Source: XRPUSD on TradingView.com
The Ripple’s gains primarily appeared in the wake of a market-wide price rally across the cryptocurrency market. Traders raised their bids on all the top-cap coins after Bitcoin logged record highs above $37,500. Altcoins usually do better after Bitcoin tops out. That partially explains why XRP surged.
Meanwhile, the token also surged as Ripple signed a deal with Saudi Arabia’s central bank to innovate their payment infrastructure with blockchain solutions. The news signified Ripple’s expansion plans outside the US, especially as it faces a lawsuit from the Securities and Exchange Commission (SEC) over alleged illegal securities’ sales.
The potential court battle has prompted crypto brokers exchanges to drop XRP support from their services. They include Voyager Digital, Grayscale Investments, Blockchain.com, Coinbase, Binance, and OKCoin. Bitwise Assets Management also liquidated $9.3 million from their crypto index fund.
A group of XRP investors has also sued SEC’s Chairman Jay Clayton, alleging personal hostility over his enforcement action against Ripple.
Dead Cat Bounce
XRP’s rise, despite its fundamentally bearish bias, has raised concerns about a fake rebound. One pseudonymous analyst tweeted on Thursday that he sees the XRP/USD’s pullback as “dead cat bounce” — a small, brief recovery in the price of a declining asset.
Ripple's potential price action, as illustrated by IncomeSharks. Source: XRPUSD on TradingView.com
“XRP at strong horizontal support, but even if it holds the upside in buying here is minimal,” the analyst said. “It took years for it to move, and it could be years for it to recover. There are much better assets to trade, in my opinion. The odds of $0.50 to $1.00 are even lower than before.”
Meanwhile, independent analyst Michaël van de Poppe stated that XRP/USD would need to break above the $0.31-$0.34 range to confirm a steady bullish bias. Until that happens, the pair’s likelihood of facing more sell-offs would increase.
$XRP needs to crack this significant resistance zone to be able to continue the upward push.
If that doesn’t occur, more consolidation is required.
— Michaël van de Poppe (@CryptoMichNL) January 7, 2021