Ripple’s digital currency, XRP, has made a recovery after reaching a low of $0.5078 on October 3rd, following the announcement of its new stablecoin tied to the US dollar. Currently trading at $0.5500, XRP’s market capitalization stands at $31.2 billion, making it the seventh largest cryptocurrency.
However, XRP has performed poorly compared to most other cryptocurrencies this year, experiencing a 6.3% decline. In contrast, Bitcoin has seen a 54.4% increase, while Pepe has surged by nearly 800%.
Despite these challenges, Ripple has achieved several significant milestones in 2021. The company was fined a mere $125 million in its long-standing legal battle with the Securities and Exchange Commission, a significant reduction from the originally requested $2 billion.
In addition, Ripple has also launched its own stablecoin, RLUSD, with the intention of competing against established stablecoins like Tether, Circle, and PayPal. As previously reported, RLUSD will initially be available on platforms such as Uphold, Bitstamp, and MoonPay.
Stablecoins have proven to be a profitable business model in the financial services industry, with Tether’s recent filings revealing it to be more profitable than Blackrock, a company that manages over $11 trillion in assets. Stablecoin issuers generate revenue by investing their funds in low-risk assets, such as Treasuries. However, new issuers face the challenge of competing with Tether, which boasts $120 billion in assets. For instance, PayPal’s PYUSD currently has only $632 million in assets, making it the ninth-largest stablecoin.
Furthermore, Ripple has introduced the XRP Ledger, an open-source blockchain designed as an alternative to Ethereum and Solana. Although it initially experienced significant growth, the total value locked in the network has now stagnated at around $14.6 million. However, data from Santiment indicates a recent increase in the number of wallets on the chain.
Looking at XRP’s price chart, it has gradually risen this month. However, on the daily chart, it is currently below the Ichimoku cloud, which is a bearish indicator. Moreover, XRP has formed a bearish flag pattern, characterized by a long flagpole and a flag-like pattern. The flag section resembles a rising wedge, which is another bearish signal.
As of now, Ripple remains below the 50-day moving average and has formed a double-top pattern at $0.6592. Therefore, it is likely that XRP will experience a bearish breakout in the near future. If this occurs, the next significant level to watch would be $0.5021, which is the neckline of the double-top pattern and represents an 8.50% decrease from the current level.
In response to the Securities and Exchange Commission’s actions, Ripple has filed a cross-appeal, further intensifying the legal battle.