On Tuesday, April 6, Binance’s XRP rate rose 46% to a three-year high of $ 1.1. At the same time, at the beginning of the month, altcoin quotes were $ 0.52, that is, they doubled in less than a week. Cryptocurrency capitalization exceeded $ 47 billion, according to this indicator, it took the fourth place among all digital money, writes RBC Crypto.
XRP’s growth is a reflection of its strong undervaluation in connection with Ripple’s litigation with the US Securities and Exchange Commission (SEC), explained Yuri Mazur, head of data analysis at CEX.IO Broker. While the entire cryptocurrency market was updating its highs, XRP remained at local lows, while losing its place in the top 3 cryptocurrencies in terms of capitalization.
In December 2020, the SEC accused Ripple and its executives of raising over $ 1.3 billion by selling unregistered securities under the guise of XRP tokens. This led to the fact that some exchanges, including the American Coinbase, delisted the coin. However, in March, the SEC representative stressedthat apart from Ripple and its employees, no investors, exchanges or trading platforms are breaking the law by selling XRP tokens.
“Now that both bitcoin and many altcoins have shown significant growth, investors are trying to catch up. The main risk is the confrontation between the leadership of Ripple and the SEC, but here the prospects are not completely clear. So far, both Ripple and the American regulator have an equal chance of winning, ”Mazur explained.
According to him, the growth potential of the coin could exceed 300% from current levels. Mazur called it important that investors who invested their capital in XRP at the peak in January 2018 are now trying to “pull prices up” in order to get out of the asset with minimal losses.
“XRP growth in the second quarter will be capped at $ 1-1.2 levels, but this is a baseline scenario that does not take into account the impact of fundamental data that may appear. The fundamental factor in XRP’s behavior will be the development of the situation with the SEC, if market participants see a hint of a solution to the situation in favor of Ripple, XRP quotes will immediately respond with significant growth, and it is possible that this growth will not only return Ripple to its 2018 peak above $ 3, 7, but also to new historical highs, ”predicted Mazur.
XRP has been “at the bottom” for too long (the accumulation phase began in August 2018), and, fueled by rumors of litigation with the SEC, traders have accumulated a significant short position in the token for the period from November to February 2020-2021, added lead analyst at 8848 Invest Viktor Pershikov. Thus, the surge in prices caused the liquidation of some of the short positions, which also influenced the strength of the growth, the expert noted.
Over the past day, the largest number of liquidations fell on trading pairs with the XRP token, according to bybt. Due to the sharp rise in the asset’s quotes, users lost about $ 230 million.
“The immediate target for the token is at $ 1.3, but I do not exclude a stronger rise in the price of Ripple in the coming months. Despite the negative background, the Ripple project continues to develop, so the asset has prospects for renewing its historical maximum, “Pershikov suggested.
Now the XRP rate is going up amid rumors that Ripple and the SEC may come to an agreement in favor of the cryptocurrency, and it will again be added to the American cryptocurrency exchange Coinbase. The situation with the XRP rate depends on the outcome of the proceedings, said Vladimir Smetanin, CEO of the Swiss financial company Newcent. He added that in addition to this there is a technical growth factor – now altcoins are actively rising in price, while the price of bitcoin practically does not change.
On April 6, the bitcoin dominance index dropped to 54%. This is the minimum value over the past two years. If over the past day XRP has risen in price by almost 50%, then Bitcoin – only by 2%. While Ethereum rose 4%, Binance Coin rose 10%. This may indicate that investors have shifted their focus from the main digital coin to altcoins.