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Ripple Price Analysis – Technicals for USD pair lean neutral to bearish

On-chain fundamentals for XRP have been difficult to read because of a recent spam attack and funds rotating in an out of escrow. Technicals for the XRP/BTX pair are bearish and for the XRP/USD pair suggest a Golden Cross may be surpassed by a Death Cross.

Ripple (XRP) is a payment protocol and network token which aims to compete with the banking protocol SWIFT. The crypto asset is currently down 91% from the all-time high established in January 2018. XRP is 4th on Brave New Coin’s market cap table and stands at US$10.85 billion based on a 44.11 billion XRP circulating supply.

Watch a summary of this analysis on YouTube

Tether ([USDT]( surpassed XRP by market cap on August 31st. Over the past 24 hours, the asset has had US$342 million in trade volume.


XRP was created in November 2012 by three founders; Arthur Britto, Chris Larsen, and Jed McCaleb, in collaboration with Ryan Fugger who began working on a payment protocol in 2004 called RipplePay. The project, which was closed source at that time, was incorporated under a new name, NewCoin, in September 2012. NewCoin rebranded to OpenCoin in October 2012 and then rebranded again, to Ripple Labs, in September 2013.

McCaleb resigned in May 2013, officially leaving the project in July 2013, and went on to create Stellar (XLM) in July 2014. McCaleb previously founded the MT GOX exchange, in 2010, which was sold to Mark Karpeles in March 2011.

McCaleb received a reported 5.3 billion XRP at the time of leaving Ripple, which he can sell restricted amounts of, based on a 2016 settlement that set yearly limits. On September 7th, 2019, he received a further 100 million XRP. As of February, McCaleb has sold over one billion XRP and holds a remaining 4.7 billion XRP, which suggests continued XRP token selling pressure for many months going forward.

Since 2015, Brad Garlinghouse has served as the Ripple Labs CEO, with David Schwartz serving as CTO since July 2018. Schwartz joined Ripple Labs in 2011 as Chief Cryptographer. In 2019, there were several new changes in the upper management of Ripple Labs

  • In January, Stuart Alderoty, who had previously worked at CIT Bank, HSBC, and American Express, joined Ripple as general counsel.
  • In February, Cory Johnson, previously Chief Market Strategist, was removed from the Ripple website, with Ripple stating that "due to changes in market conditions, we’ve chosen to eliminate the role."
  • In May, Breanne Madigan, former Goldman Sachs executive and former head of institutional sales and strategy at became the head of global institutional markets at Ripple.
  • In July, former head of Ripple Institutional Liquidity, Catherine Coley, was announced as the CEO of BAM Trading Services, the operator of Binance’s upcoming U.S. crypto exchange.
  • In September, Ron Hammond, who also helped craft the Token Taxonomy Act, was announced as the new Manager of Government Relations.
  • In October, Craig Phillips, who had previously held leadership roles at Morgan Stanley and BlackRock, joined the Ripple board of directors. Phillips also most recently served as Counselor to the United States Secretary of the Treasury, Steven Mnuchin.
  • Earlier this year, head of XRP markets, Miguel Vias, left Ripple according to his LinkedIn account.

Initially, 100 billion XRP were minted by the founders, with 80% of that supply held by the currently branded Ripple Labs, which is also known as “Ripple.” In May 2015, the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) determined that Ripple Labs was the “administrator” of the XRP tokens and levied the company with a fine of US$700,000 for failing to register as a money service business. In January, Garlinghouse also announced a Ripple IPO with equity will likely be held soon.

To ease concerns regarding circulating supply, Ripple announced a programmatic escrow system in December 2017 for the 55 billion XRP held by the company at that time. One billion XRP are unlocked from escrow and offered for sale each month. Any unsold XRP is then placed back in escrow at the end of the month.

Ripple’s Q2 2019 report revealed Ripple would be “substantially reducing future (programmatic) sales of XRP”, which are down to nearly 10% of the previous quarter. The Q3 2019 report revealed 0.7 billion of the three billion XRP released from escrow over the quarter had been purchased on the open market, down from 0.9 billion sold in the previous quarter. In December, Ripple also announced a US$200 million Series C funding round led by SBI Holdings and Route 66 Ventures. The Q4 2019, Q1 2020, and Q2 2020 report revealed zero in programmatic sales for the quarter. Earlier this year, Garlinghouse revealed, “we would not be profitable or cash flow positive [without selling XRP].”


Source: Ripple Q2 2020 Report

The gorilla in the room for Ripple continues to be whether or not the XRP tokens represent an unregistered security. Ripple initially created, escrows, owns a majority of, and continues to control the majority flow of tokens. Ripple argues that the network is decentralized, the token does not represent shares of Ripple, and that the network would continue to exist if Ripple Labs did not. Several pending court cases, as well as any comments from the U.S. Securities and Exchange Commission (SEC), will clear any regulatory uncertainty surrounding the asset.

In a motion to dismiss an active case, the Ripple legal team argued that the plaintiff did not purchase tokens during the initial offering and did not purchase any from the defendants either. The motion stated, “purchasing XRP is not an ‘investment’ in Ripple; there is no common enterprise between Ripple and XRP purchasers; there was no promise that Ripple would help generate profits for XRP holders; and the XRP Ledger is decentralized.”

In January, Ripple again attempted a motion to dismiss a separate class-action lawsuit in the Northern District of California. Ripple’s lawyers argued the complaint exceeded the three-year deadline for filing a suit outlined in the Securities Act’s statute of repose. This motion to dismiss was denied on February 26th. The judge also determined Ripple did not violate California state law. As a result, claims of false advertising and personal liability against Garlinghouse were dismissed.

The top 100 largest XRP accounts, excluding the 48.4 billion XRP currently in held escrow, hold 67.29% of the total circulating supply. Ripple, the company, holds a further 6.3 billion XRP, leaving 45.3 billion XRP in circulation.


For consensus, the XRP network uses The Ripple Protocol Consensus Algorithm, which aggregates collectively-trusted subnetworks of nodes and validators. There are currently 889 public nodes with over 55% running the most recent software, version 1.6.0. The network also has 125 active validators, 71% of which are unverified and 15% are controlled by Ripple.

As of November 2018, a Ripple server required approximately 12GB of data storage per day and 8.4TB to store the full XRP ledger.** **However, a full node is not required to participate in the network, and nodes can prune the ledger to free disk space.



Ripple offers a suite of tools for enterprise and banking solutions, collectively known as RippleNet, including; xCurrent, xRapid, and xVia. xCurrent processes global bank to bank payments for customers and is analogous to SWIFT. xRapid, which went live in October 2018, sources on-demand liquidity through buying and selling XRP. xVia can be used to send unidirectional payments. Of the three tools, only xRapid requires the use of the XRP token. In October 2019, Ripple announced the services would now all connect through one RippleNet portal.

In Q1 2020, Ripple reported a 294% increase in RippleNet Usage. Earlier this year, SBI holdings also announced plans to integrate Ripple-powered MoneyTap with ATMs throughout Japan. Santander also joined RippleNet in July 2020. Ripple is also hiring a product manager to direct a loan offer through RippleNet.

In July 2019, Ripple announced a US$30 million investment in MoneyGram, announcing a strategic partnership with RippleNet. Ripple agreed to provide a capital commitment to MoneyGram, enabling the company to draw up to US$50 million in exchange for equity over a two-year period. In November, Ripple invested a further US$20 million in MoneyGram, increasing Ripple’s stake in the company to about 10% and allowing for a further increase to 15% total stake in the future. In Q1 2020, MoneyGram reported receiving US$16.6 million in XRP for being a RippleNet partner.

Ripple also has two other monetary arms to foster the growth of the ecosystem, a venture capital arm, and a university blockchain research initiative (UBRI).

The venture capital arm, Xpring, invests in, incubates, acquires, and provides grants to companies and projects run by proven entrepreneurs. In May 2019, Xpring invested in Agoric, a smart contract platform. Other public investments of Xpring include Dharma, Kava, XRPL Labs, Forte, and Bolt Labs. Recent investments include the Coinme ATM provider, the Logos Network, a self-custody startup Towo Labs, and a US$750,000 infusion to BRD wallet.

In June 2020, Xpring joined over 46+ companies including, BitPay, Brave, Flutterwave, BitGo, GoPay, Care and Mercy Corps to unveil PayID, a universal payment ID to simplify the process of sending and receiving money globally, across any payment network and currency. The companies collaborated on the development of the open-source solution through the Open Payments Coalition, which jointly reaches over 100 million consumers.

The UBRI has US$50 million in funding reserved for grassroots research and development related to XRP. In total, the UBRI consists of over 40 universities worldwide and the UBRI has helped launch over 100 active research projects on various topics.

Additionally, Rippleworks, a non-profit focused on funding social ventures, was created in 2015 by Chris Larsen and Doug Galen. Rippleworks has paired startups and technology experts with 80 different social ventures. In 2019, Larsen and his wife donated US$25 million in XRP tokens to San Francisco State University.

The external XRP protocol ecosystem includes Interledger, Coil, and Codius, all of which are related in terms of functions and development teams.

The Interledger Protocol (ILP) is capable of sending payments across different distributed and decentralized ledgers, and moves funds via intermediaries. In May 2019, Stronghold integrated with ILP to issue the Stronghold USD stablecoin.

Coil enables subscription-based donations for content monetization on the internet, without advertising or selling user data, and pays sites in real-time through a Web Monetization API. A similar micropayment system for content monetization is used by the Brave browser. Coil uses ILP and Stronghold USD to pay content creators. Earlier this year, senior Ripple developer Evan Schwartz left Ripple to join Coil.

Codius is a smart contract and smart program platform allowing for interoperability between blockchains. In November 2018, the Bill & Melinda Gates Foundation announced plans to use ILP and Coil, in conjunction with Mojaloop, to bring payments to the under and unbanked.

On the network side, transactions per day increased to nearly four million, late last year, a four-fold increase over the prior month. Most of these transactions were generated by the “Payment” and “OfferCreate” function, a transfer of value and a currency exchange facility, respectively. The spike in these transactions likely represents spam by attempting to send fake transactions.

Since January, transactions per day (red line, chart below) decreased to the previous range, hitting multi-month lows in early July. Over the past few weeks, transactions per day briefly increased to multi-month highs. However, according to analysis done in May 2020 by Cornell, 94% of on-chain ledger transactions carry no economic value. The average transaction fee (green fill, chart below) remains US$0.000144, among the lowest of any cryptocurrency.


Source: CoinMetrics

Weekly active addresses (WAA) have decreased substantially since January 2018 (red line, chart below) but reached an 18-month high in mid-July 2019. The spike in WAA most recently was likely related to the spam attack on the network. A sustained uptick in active addresses should be seen as a bullish indicator, suggesting an increase in demand for the asset. The largest increases in WAA were in mid and late 2017, corresponding to large increases in price.

Average transaction values (green fill, chart below) on the network have essentially held between US$1,200 and US$8,000 since March 2018. Due to monthly escrow transactions, these values are likely slightly higher than actual organic use. In December 2017, average transaction values reached US$65,000 when Ripple began the long term escrow for XRP.


Source: CoinMetrics

The 30-day Kalichkin network value to estimated on-chain daily transaction ratio (NVT) is currently 150 and falling (red line, chart below). Escrow transactions or coin arbitrage on the XRP network will falsely skew NVT significantly lower. A sharp decline in NVT below 100 would suggest bullish price action, which last happened in December and January 2018.

Although NVT is difficult to compare between coins, which use different transaction types, the metric can be useful when comparing a network’s relative utility over time. For example, XLM, which uses a similar network structure to XRP, currently has an NVT of 430.


Source: CoinMetrics

Turning to developer activity, the Ripple project has 77 Github repos with over a cumulative 1,100 commits in the past year from over 170 contributors. Rippled version 1.6.0 was released earlier this quarter. Most of the XRP related commits occurred in the Ripple dev portal (top chart below) while the rippled repo has seen very few commits over the past few months (bottom chart below).

Most coins use the developer community of Github where files are saved in folders called "repositories," or "repos," and changes to these files are recorded with "commits," which save a record of what changes were made, when, and by who. Although commits represent quantity and not necessarily quality, a higher number of commits can signify higher dev activity and interest.


Source: Github – xrpl-dev-portal


Source: Github – rippled

Aside from a brief period between December 2017 and February 2018, worldwide Google Trends data for the term "Ripple" has mostly been pinned to the floor. The increase in 2018 likely signaled a large swath of new market participants at that time. A 2015 study found a strong correlation between the google trends data and bitcoin price, while a 2017 study concluded that when the U.S. Google "bitcoin" searches increase dramatically, bitcoin price drops.



Technical Analysis

The XRP/USD spot price has declined 25% over the past few months, after a complete recovery from the March drop. To determine bullish or bearish entry and exit points moving forward, Exponential Moving Averages, Volume Profile of the Visible Range, and the Ichimoku Cloud can be used. Further background information on the technical analysis discussed below can be found here.

On the daily chart for the XRP/USD market, the 50-day and 200-day Exponential Moving Average (EMA) created a bullish Golden Cross on August 3rd. The 200-day EMA, at US$0.2375, should continue to act as support. Over the next two weeks, a bearish Death Cross is likely to occur, signaling a prolonged bearish rally. Yearly pivot resistance sits at US$0.40 and US$0.29 with support at US$0.077.

Volume has increased substantially over the past six months on Bitstamp and may represent a combination of capitulation and selling from Jed McCaleb. Volume Profile of the Visible Range (VPVR, horizontal bars on the chart below) shows that most of the trading volume historically occurred near the US$0.20 zone on Bitstamp. The indicator also shows relatively little volume above US$0.50. Since September last year, the asset had been trading in a defined range between US$0.18 and US$0.53.

Long/short open interest (top panel, chart below) on Bitfinex is currently 88% long, with longs increasing and shorts decreasing over the past month. A significant price movement downwards will result in an exaggerated move as the long positions will begin to unwind. This is known as a "long squeeze", which likely contributed to the drop on March 12th.


Turning to the Ichimoku Cloud, there are four key metrics; the current price in relation to the Cloud, the color of the Cloud (red for bearish, green for bullish), the Tenkan (T) and Kijun (K) cross, and the Lagging Span. Trades are typically opened when most of the signals flip from bearish to bullish, or vice versa.

Daily Cloud metrics, with doubled settings (20/60/120/30) for more accurate signals, are currently bearish; the spot price is below the Cloud, the Cloud is bullish, the TK cross is bearish, and the Lagging Span is above the Cloud and below the spot price. The trend will remain bearish so long as the spot price remains below the Cloud. Kumo resistance currently sits at US$0.262.


Lastly, on the daily XRP/BTC chart, trend metrics are bearish. Over the past few weeks, the spot price briefly breached the 200-day EMA and the daily Cloud (not shown) for the first time since early 2019. However, the spot price still remains below a heavy VPVR resistance node at 2,500 to 3,000 sats. Significant VPVR support also sits from 500 to 1,500 sats. If price can breach horizontal VPVR resistance at 2,500 sats, a move to the yearly pivot at 5,000 sats becomes increasingly likely. Additionally, there are no bullish or bearish divergences on volume or RSI at this time.



On-chain fundamentals for XRP are skewed due to both a recent spam attack on the network and the escrow rotation of sold and unsold XRP each month. Despite the numerous RippleNet partnerships and announcements over the past several years, including recent partnerships with SBI holdings in Japan, on-chain metrics do not show a sustained increase in activity. May 2020 analysis by Cornell found 94% of on-chain ledger transactions do not contain economic utility.

For many, regulatory clarity regarding the status of the XRP token as an unregistered securities offering by Ripple Labs is still needed. To further muddy the waters, Ripple has also floated plans for an IPO in the near future.

Technicals for the XRP/USD pair are neutral to bearish, with the spot price above the 200-day EMA but below the daily Cloud. A Golden Cross, which last occurred in May 2019, may soon be surpassed by a Death Cross, signaling the start of what is traditionally a period of prolonged bearish bleeding.

Technicals for the XRP/BTC pair are bearish, with price now below the 200-day EMA and the daily Cloud. Strong upside resistance sits at 2,500 sats with downside support sits at 1,500 sats. Continued selling pressure by Jed McCaleb on Bitstamp may dampen any bullish rally for both pairs in the short term and exacerbate any bearish rally.


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