Bitcoin sold off this week, and with it the entire crypto market. Interestingly XRP held up relatively well even relative to Bitcoin. As explained in Bitcoin Selloff Respects Support, Will Trigger Epic Battle Between Bears and Bulls we only track 8 charts during a sell off like the one this week. One of those 8 charts it the XRP chart relative to BTC, and especially the solid pattern that we see on there (sign up here to see this pattern). Even though BTC and the entire crypto market are at risk to break down we continue to see amazing signs from XRP, fundamentally (whatever that means in crypto land). Whatever happens in the broader crypto market with crypto prices we know one things for sure: XRP is a rock star, and will continue to be a rock star in 2020. This is why.
Let’s review 3 fundamentally important evolutions visible in the last few weeks when it comes to XRP.
XRP great adoption underway
First, the number of XRP network transactions has exploded in recent weeks. The chart in this tweet visualizes the XRP transactions in the last 6 months. Clearly, there is something happening with XRP.
We call this ADOPTION, and it is THE most important factor in our selection of top crytocurrencies for the future. Unsurprisingly, XRP is now in the process of proving out how much value they add in real life. Good luck finding another cryptocurrency that has the same characteristics, there are only a handful of them that are able to prove value in this real world (not in an imaginery or isolated crypto world).
Second, and presumably related to #1, the liquidity index of XRP to Mexican Peso’s is rising for several months like crazy. This chart shows XRP to MXN.
What is not well known is that US Dollar to Mexican Peso’s is among the largest corridors in the world. It means that there is huge amounts of money being converted from US Dollars into Mexican Peso’s. Now that XRP is being used for instance by Moneygram it becomes clear how XRP is creating value in real life, and is starting to do so at scale.
Not any other cryptocurrency has been able to prove the same.
Third, Moneytap is preparing a golive in Japan and South East Asia. Ripple announced to play an important role in Moneytap which is a mobile banking app which allows to do payments to merchants (physical stores) by means of a QR code.
The Moneytap app was expected to reach a large audience especially in Japan. Interestingly the latest news is that a large consortium of banks in South East Asia will join this, driven by giant SBI Bank’s CEO Yoshitaka Kitao who is a board member of Ripple and a firm XRP believer.
XRP fundamentally sound, why is its price struggling?
Now with all of these great evolutions why is the price of XRP not moving?
We get this question almost every day in our mailbox. Let’s clear this for once and forever.
First, fundamentals and technicals never line up. Never will you see a price reaction reflect fundamentals simultaneously. There is either a lag (good) or speculation earlier (not good).
Second, XRP has a track record to consolidate for a long time. We said before XRP: the Longer the Base, the Higher in Space.
Oh, the above chart was a daily one one year.
What do you make from the next one which is as long as XRP is in existence (summer 2014)? Does anyone see any similarity over time? Any recurring pattern that characterizes XRP?
Third, XRP is a cryptocurrency. If all cryptocurrencies go down XRP is likely to follow.
It is like precious metals: if gold is very bearish you can reasonably expect silver and precious metals stock to be bearish. The ones that are neutral or bullish are the ones that you really want to own for when the tide turns.
Crypto is not any different. XRP is in relative terms strong.
We obviously want to see that the current support levels hold up. If that’s the case, once crypto selling is over, you will see fundamentals being reflected in the price of XRP.
It may take days, weeks, months, even years. But patience is what made many investors ultra rich, we believe an XRP investment today will be any different.