Why is Ripple (XRP) going up?
3 min read
Over the past few days, the price of XRP (Ripple) has been rising clearly and significantly.
At the end of March, the price was hovering more or less around $0.5, but in the following days, it has practically doubled and is now fluctuating around $1.
It is worth noting that at the beginning of 2021 it was worth around $0.2, so its price has increased fivefold since then, despite the fact that in December 2020 it had already risen a first time to almost $0.7.
Indeed, the current price of around $1 is the highest price in three years, as it hadn’t managed to climb this high since February 2018.
The all-time high of $3.4 touched on January 7th, 2018 at the height of the great speculative bubble of late 2017 is still a long way off, but the $1 threshold has only been crossed by XRP for just over a month and a half of its entire history on the crypto markets.
After the great speculative bubble burst in late 2017, its price first fell to $0.7 in February 2018, then to $0.5 in April 2018, before plummeting below $0.3 at the end of the same year.
It has since fallen once more below $0.2 during the global financial market crash of March 2020 but had never managed to return to $1, despite some attempts to regain $0.5.
In November 2020 it had actually tried to rise to around $0.7, but the news of the SEC’s lawsuit against Ripple took it down again and in the last two weeks of December, it lost 64% to $0.2.
At the beginning of February 2021, however, it began to recover, returning to around $0.5, and remained there until mid-March despite a failed attempt to return to $0.7 in mid-February.
Why is Ripple (XRP) rising: the hypothesis
At this point, it is fair to ask what has generated the doubling in value over the past few days.
The reasons are not known precisely, but there are two hypotheses that seem plausible.
The first concerns the re-listing on certain exchanges. In fact, after the news of the SEC lawsuit, some major crypto exchanges had temporarily suspended trading. Now there are indications that the opening of trading on several major exchanges may be imminent, and this has generated enthusiasm among buyers, as cryptocurrencies that are listed on major exchanges often experience strong positive price jolts.
However, it is worth noting that this is not an actual listing, but merely the removal of the temporary suspension of the trading freeze.
The second hypothesis concerns the reasons that may have prompted some major exchanges to eventually decide to unblock XRP trading.
In fact, some imagine that this reason could be linked to non-public information regarding the SEC’s case against Ripple. If Ripple were to win, XRP could certainly regain the attractiveness it lost in December.
Furthermore, it is important to note that from December to March, whilst XRP “only” rose from $0.2 to $0.5, its main rivals for the third position among the most highly capitalized cryptocurrencies posted much higher gains, especially when compared to December values.
Therefore, it is possible that if the ballast that has prevented XRP from appreciating as much as rival cryptocurrencies is removed, its price could rise further, perhaps moving a little closer to the all-time high of $3.4 that still seems a long way off. For example, BTC as well as ETH, BNB, DOT and ADA all updated their all-time highs in 2021, while XRP has not yet done so.
The post Why is Ripple (XRP) going up? appeared first on The Cryptonomist.
