Ripple (XRP) has recovered 70% since the lows in mid April. The market cap now stands US$81.6 billion, with US$624 million in trading volume over the past 24 hours.
In Ripple’s Q1 2018 report, it was revealed that the money service business, XRP II LLC, sold US$16.6 million of XRP to market participants. The company also sold US$151.1 million worth of XRP “programmatically” which represented 0.095% of the US$160.0 billion globally traded in Q1.
One billion XRP was released in January, February, and March out of a cryptographically-secured escrow account that mimics a Proof of Work coin distribution. Of the three billion XRP released, 90% was returned to escrow, while the remaining 300 million XRP are “being used in a variety of ways to help invest in the XRP ecosystem.”
Another company affiliated with XRP, Ripple Labs, continues to increase global brand awareness and adoption through the use of RippleNet processes. RippleNet is composed of; xCurrent, which processes global bank to bank payments for customers, analogous to SWIFT; xRapid, which sources on-demand liquidity; and xVia, which plugs into RippleNet to send unidirectional payments. xRapid requires the use of XRP whereas xVia and xCurrent do not.
Santander recently announced its new international payments service, the One Pay FX app, which uses xCurrent to complete international transfers. The Boston-based retail banking company with operation in 10 European countries and the Americas currently offers the service in Spain, the UK, Brazil, and Poland. SBI Holdings, a Tokyo-based financial services company, also began using xCurrent for remittances in March, with its Money Tap app.
Five companies experimented with the use of xRapid throughout Q1 2018; Western Union, Cambridge Global Payments, MercuryFX, IDT and MoneyGram. Mercury FX, an international currency exchange and transaction service, confirmed that xRapid will “lower liquidity costs & increase payment speed and transparency,” after a months long test of the service. Additionally, Mercury FX will be proceeding with additional testing and moving to production.
Ripple also announced five new payment originators who have begun to use xVia; FairFX (UK), RationalFX (UK), Exchange4Free (UK), UniPAY (Georgia), MoneyMatch (Malaysia). Ripple has positioned xVia as a solution for payment gateways in emerging markets, such as Africa and India. Today it was announced that BankDhofar, Oman’s second largest bank by market value, will also join RippleNet.
Ripple also made major headlines last past month after funding $29 million of school projects on Donor’s Choose, and a 400 person invite-only community night featuring the rapper Snoop Dogg on May 14th in New York City during Blockchain Week.
On the network side, transactions per day remain around 900,000 with a somewhat stagnant trend over the past few years. Transaction fees, which correlate with network traffic, have been minimal compared to other coins, and are currently around US$0.006 for each transaction.
The network value to estimated on-chain daily transaction ratio (NVT) has also been trending lower since July 2015 (log scale), suggesting transactional use has increased since that time, reaching a low in January. Although NVT is difficult to compare between coins, which use different transactions types, it can be used to assess the network’s relative utility over time. XRP’s daily NVT remains relatively low based on historical data.
Exchange-traded volume has been led by Korean Won (KRW), Bitcoin (BTC), and Japanese Yen (JPY). The relatively large volume in Asian markets is in stark contrast to Bitcoin and Ethereum which are mainly dominated by US Dollar and Tether pairs. The majority of trading has occurred on Bithumb, UPbit, Binance, OKEX, and Bitfinex. Koinex, an Indian exchange, began to list 8 XRP-based pairs this past week.
After pullbacks from ATH in January, which correlated with the rest of the crypto market, XRP has begun to show signs of trend reversal. The status of any existing or emerging trend can be determined using Ichimoku Cloud, Pitchfork, and Moving Averages. Further background information on the technical analysis discussed below can be found here.
On the three day chart, price looks to have broken out of a descending triangle on light volume. This classic chart pattern yields a measured move and 1.618 fib extension of US$3.45 and US$4.32 respectively. A stop loss for this long trade would be placed below the breakout point at US$0.45.
On the daily chart, the status of the current Ichimoku Cloud metrics, with doubled settings (20/60/120/30) for more accurate signals, are beginning to flip neutral; price is in Cloud, Cloud is bearish, the TK cross is almost bullish, and the Lagging Span is above price and below Cloud.
The Ichimoku Cloud uses four metrics to determine if a trend exists; 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. The best entry always occurs when most of the signals flip from bearish to bullish, or vice versa.
Traditionally, a long position would not be entered with the current daily metrics until price is above Cloud. However, a long entry can be made based on the Edge to Edge principle. This trade is triggered when price breaches Cloud resistance and has a target of the opposite edge of the Cloud, ~US$1.80. These trades have a higher probability of success when the TK cross is also bullish, which is not currently the case.
The status of the current Cloud metrics on the 12 hour time frame, with doubled settings (20/60/120/30) for more accurate signals, are beginning to flip bullish; price is nearly above the Cloud, Cloud has almost twisted bullish, the TK cross bullish, and the Lagging Span is above price and almost above Cloud. Together, this setup shows the classic signs of a long entry, triggering when Cloud twists bullish and price is above Cloud, with a target of ~US$1.94 based on the previous flat Kumo.
When comparing and contrasting the daily and the 12 hour charts, using doubled settings, the daily time frame clearly shows expected entry and exit based on the size of the Cloud. The 12 hour time frame better elucidates a precise entry based on traditional Cloud signals. Doubled Cloud settings on the 12 hour time frame are also equivalent to singled Cloud settings on the daily time frame. Both time frames show roughly the same signals are can be used interchangeably depending on how a trader wants to visualize trade setups. In general, most cryptocurrencies have faster moves when compared to Bitcoin, and therefore a faster signal is preferred by most to catch a better trade entry.
A bearish Pitchfork on the 12 hour chart, with anchor points in December and February, shows price above the entire Pitchfork. This suggests confirmed bullish invalidation of the downtrend. Additionally, the 50/200EMAs will likely cross bullish in the next few days. Price has been held above the 200EMA for the past several days.
The XRP/BTC pair shares the same bullish characteristics as its USD counterpart; price broke out of a Falling Wedge chart pattern, a Cloud Edge to Edge trade has been triggered, and the 50/200EMAs remain bullish. The Edge to Edge trade yields a target of 12,000+ satoshis and the Falling Wedge carries a 1.618 fib extension of 25,000 satoshis, or essentially the R1 yearly pivot.
Ripple continues to collect banking partnerships around the world. While these partnerships increase the awareness of Ripple and the use RippleNet, they do not necessarily correlate to increased XRP adoption. Unless services use xRapid, there is not a direct impact on XRP demand in the broader marketplace.
The strategy announced last year to escrow and release most of the XRP in existence slowly over time is a step in the right direction towards a more transparent monetary policy. However, how, when, and why Ripple the company sells XRP programmatically for certain costs is not immediately clear. Additionally, the volume figure of “US$160.0 billion traded globally,” claimed in the Q1 report, may be highly inflated if the number is cited from fee-free exchanges which are known for wash trading and fake volume.
Technicals suggest bullish reversal with optimal long entries soon based on the above Chart Patterns, Ichimoku Cloud, and Moving Averages. A short term target of ~US$1.80 and a longer term target of ~US$3.88 are possible.
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