Yerevan (CoinChapter.com) — It was not easy for XRP to come out of the fear, uncertainty, and doubt created by a lawsuit that questioned its very existence as a cryptocurrency. But heading into 2021, the Ripple blockchain’s native token looks ready to leave the controversies behind.
The XRP/USD exchange rate jumped up to 795 percent this year as it reached its three-year high at $1.966. What caused the massive pump remains uncertain, but a consensus believes it is the Ripple Labs’ latest courtroom victories that brought investors back into the XRP market.
Court Is The Real Bull
In retrospect, the US Securities and Exchange Commission filed a lawsuit against Ripple Labs, a San Francisco-based blockchain startup aiming to simplify cross-border payments using XRP as its settlement token. In its December 2020 court filing, the agency alleged that Ripple and its top management team sold illegal securities to their early investors in the form of XRP tokens.
Ripple logged early victories in the lawsuit. The company managed to gain access to the minutes of the SEC’s meeting wherein the agency discusses the nature of cryptocurrencies in general. Many believe that the SEC treated XRP the same as its rivals Bitcoin and Ethereum but chose to brand the latter two as utility tokens. If true, Ripple could gain a substantial legal lead against the US securities regulator.
On the other hand, the court denied the SEC’s appeal to access private financial records of Ripple CEO Brad Garlinghouse. Bulls also welcomed the news with open arms as they continued buying XRP on its higher high formations.
Other factors also provided tailwinds to the ongoing XRP price boom. That included a slowdown in Bitcoin’s uptrend in the past few weeks. As the top cryptocurrency settled near $60,000, traders started increasing their exposure in its alternatives, benefiting XRP as well as Ethereum, Binance Coin, Cardano, and other higher-cap “altcoins.”
Bitcoin broke above $60,000 earlier this week and was trading a little above $64,500 on Wednesday. According to data fetched by Crypto Watch, the cryptocurrency’s correlation with XRP stands near 0.26. It means XRP has a slight likelihood of tailing the Bitcoin price trend.
XRP Technical Outlook
A continuation in the XRP’s upside momentum could lead its prices to $2.19 next.
The Fibonacci retracement graph in the chart above measures potential upside and downside targets as XRP moves higher. For now, the tokens trades inside the $1.75-2.19 range, with $2.19 being the next upside target. Meanwhile, XRP’s Relative Strength Indicator alerts about a potential downside correction that could lead the price back to $1.75, or even lower towards $1.44.
Overall, the Ripple token sits in a comfortable bullish position. The token can continue its rally if backed by legal wins. But the jury is still out on whether or not it is a security. Trade wisely!
Photo by Braxton Apana on Unsplash
Yashu Gola is a Mumbai-based finance journalist. He is profoundly active in the bitcoin space since 2014 – and has contributed to several cryptocurrency media outlets, including CoinChapter, NewsBTC, FxDailyReport, Bitcoinist, and CCN. Academically, Yashu holds a bachelor's in information technology, with majors in data structures and C++ programming language. He has also won the 'Atulya Award' for his efforts towards raising $100,000 for an India-based farming project.
No time to read? Crypto articles too technical? Only want the facts?