Ripple Vs Bitcoin: Is It Profitable To Hold XRP Or BTC In 2024?
Ripple Vs Bitcoin: Is It Profitable To Hold XRP Or BTC?
Key Takeaways
- The XRP price has underperformed against BTC by 96% since 2018 outlining a clear bear trend.
- The Relative Strength Index (RSI) outlines a weak momentum for XRP relative to Bitcoin’s growing strength.
- Historical pumps in the XRP price vs BTC illustrate diminishing returns, suggesting investor caution.
- Overcoming the XRP bear trend against BTC rests on significant market shifts.
Deciding between an XRP or BTC investment requires an understanding of the behaviors in price of both cryptocurrencies as well as understandings of the technological applications of both XRP and Bitcoin. This article evaluates the insight into both cryptocurrencies as investment potentials.
Example: If an individual on 01 January 2018 bought $1000 worth of XRP and $1000 worth of BTC that person on April 2024, circa seven years on, would have the following today:
- In 2018 $1000 bought 309 XRP: In 2024 the XRP bought in 2018 is worth $148 in April 2024 equivalent to a circa 84% loss.
- In 2018 $1000 bought 0.057 BTC: In 2024 the BTC purchased is worth $3,612 in April 2024 equivalent to a circa 364% gain.
XRP Analysis Against BTC: Technical Insights
Technical indicators such as price trends and resistance lines are referred to in this XRP/BTC analysis as well as the Tom De Marc TD sequential indicator, which is a tool to measure the momentum of price versus time.
The analysis seeks to determine if the XRP price will continue to devalue against BTC and to try to understand which is the better hold for both traders and investors in 2024.
XRP Struggle Against Bitcoin: Understanding A Ripple Decade-Long Performance And Future Outlook Versus Bitcoin
Analyzing the XRP/BTC chart from 2014 to 2024 provides a narrative of Ripple’s (XRP) performance against Bitcoin (BTC) over a decade. The chart highlights various pumps where XRP experienced significant increases against BTC, with the percentage gains during each pump marked on the chart below.
In the above chart which illustrates the XRP/BTC price history during the period between 2014-2019, after four pronounced downtrends, which signal a rising BTC price versus XRP, it can be noticed that the price of XRP showed strength in the early days and substantial recoveries against BTC.
Specifically, during this timeframe, the following percentage gains or bounces were observed in the XRP pumps versus BTC:
- Pump 1: 2014 marked a 717% gain in XRP/BTC.
- Pump 2: 2017 saw a 3074% increase in XRP/BTC.
- Pump 3: 2018 delivered a 267% increase in XRP/BTC with this being the last occasion XRP put in an ATH against BTC.
- Pump 4: 2019 recorded a 61% rise.
These pumps often occurred after significant drops in the XRP valuation against BTC. However, post-2019, the chart indicates a diminishing intensity and frequency of these bullish reversals, suggesting a weakening of the XRP relative strength and market dynamics.
In more recent years, it becomes apparent that the pumps are becoming less and less pronounced, indicating either a continuation of the downtrend of XRP/BTC with relatively modest recoveries.
The XRP lack of intensity in its pumps vs BTC could be interpreted as a loss of momentum or diminishing investor confidence in XRP when compared to BTC. This means that since 2019 the market has clearly chosen to trust BTC as a store of value over holding XRP.
XRP vs. Bitcoin: Comparing 2018-2024 Investment Outcomes
Taking the example from 2018, XRP’s high was at 0.00022 BTC, this means 1 XRP bought 0.00022 BTC on 01 January 2018, while in April 2024 the chart is at 0.00000828 BTC. In April 2024, over seven odd years, XRP has declined 96% versus BTC.
This clearly illustrates a dramatic fall in value when compared against BTC’s significant rise from $17,000 in January 2018 to the level BTC finds itself at in April 2024 of circa $63,000 over the same period. In today’s value, if XRP pumps 2595% vs BTC that would place XRP at ($63000* 0.00022) $13.86. This price point is theoretically possible as we review fractals of the XRP/USD price in a previous article.
Yet, from a realistic standpoint and an investment opportunity, an individual holding XRP since 2018 would have witnessed a severe depreciation in their investment’s BTC value. Meanwhile, an investment in BTC in 2018 would have seen substantial growth in that same time period versus the United States Dollar (USD).
Meaning the best hold from 2018 was definitely BTC and not XRP.
The question lies in whether BTC still remains a better hold than XRP moving into the future?
XRP vs BTC Investment Analysis: Historical Performance and Future Outlook
As XRP approaches what could be another pump or a dead cat bounce, it’s essential to consider the historical trend which has shown a pattern of decreasing highs in its pairing against Bitcoin.
While a rally may occur, the overarching trajectory has been one of depreciation against BTC.
The past pumps have not reversed the long-term trend of devaluation for XRP relative to BTC. This continued devaluation, especially in the context of the growth of BTC over the same period, suggests that while XRP may have short-term speculative rallies, the broader trend has been extremely negative.
XRP’s Downward Trend Against BTC: A Closer Look with TD Sequential and Heikin Ashi Analysis
The TD Sequential is a technical analysis indicator used to identify potential price exhaustion and possible trend reversal points i.e. TD is a tool to monitor an asset’s price momentum over time. The indicator was created by Tom DeMark in the late 1970s, the indicator sequences countdowns based on the closing price of a current candle being higher or lower than the closing price of a candle several positions earlier.
This method is widely respected for its ability to signal areas where traders might consider entering or exiting positions due to potential trend fatigue. The below monthly chart spans across the last 13 months and illustrates the current count on the XRP/BTC chart using the heikin-ashi candles to filter out any noise.
In April 2024, when analyzing the monthly XRP/BTC chart using Heikin Ashi candles, the TD Sequential illustrates a count of 1 to 6 to the downside.
This suggests that if the sequence continues, there could potentially be room for 3 more months (reaching a count of 9) of downside before a TD Sequential buy setup is completed, indicating a possible area of trend exhaustion and a potential reversal to the upside for XRP against BTC.
Heikin Ashi candles help filter out market noise and make it easier to identify trends. A negative Heikin Ashi candle, which is characterized by a filled body, indicates that the average price is moving down, and thus the trend for that period is bearish. The current sequence of red or negative Heikin Ashi candles underscores the prevailing downtrend and suggests a lack of buying momentum for XRP.
This means the TD Sequential’s indicator of continued downside potential and the negative Heikin Ashi candles paint a bearish picture for XRP/BTC in the medium term on the monthly chart.
Ultimate Question: Can Ripple Overcome Its 4-Year Resistance Against Bitcoin?
When zooming out of the XRP/BTC chart one can see the decade-long history between these two cryptocurrencies. The said chart below illustrates a formidable resistance zone that has been established over a four-year period since 2020.
This zone highlighted clearly in the chart above is considered strong resistance for several reasons:
- Historical XRP price reaction: The area has historically acted as a significant hurdle where past rallies have faced rejections, indicating a concentration of selling pressure.
- Time-tested barrier: The longevity of this resistance zone reinforces BTC strength vs XRP as multiple tests over an extended period have failed to break through, suggesting a sustained bearish sentiment among traders when price approaches this level.
Regarding the downside potential, the chart outlines two arrows pointing down, representing a forecasted continuation of the current negative trend and TD count to 9 from the current level of 6. This interpretation is supported by the recent price action, which appears to be on a downtrend, making lower highs and lower lows, a classic indication of a bearish trend.
The smaller upward arrow hints at a potential for a ninth pump (chart 1). If this pump occurs but fails to yield a rise greater than 120%, it may not be enough to break through the resistance zone and the struggle to maintain upward momentum for XRP continues, potentially resulting in a “dead cat bounce” for XRP vs BTC.
Theory: A dead cat bounce is a term that refers to a temporary recovery in price following a substantial decline, suggesting that the recovery is short-lived and the primary bearish trend may resume thereafter.
Persistent Bearish Trend in XRP vs. BTC with RSI Indicating Continued Weakness
A prolonged period of devaluation for XRP when measured against the store-of-value cryptocurrency, Bitcoin since 2018 illustrates that the pattern of lower highs and lower lows on the chart illustrates a consistent bearish trend, signaling that XRP has been steadily losing ground relative to BTC.
The accompanying RSI (Relative Strength Index) mirrors this sentiment of weakening momentum, as it also shows lower highs and lower lows, failing to break out of a descending trend that began in 2018.
In 2024 the RSI reading hovers around 32 further confirming bearish momentum for XRP, suggesting that XRP is not yet in the oversold territory which might indicate a potential for further decline finding support when in oversold territory below 30.
This prolonged trend of weakness in XRP relative to BTC may continue unless there is a significant shift in market dynamics or sentiment that could trigger a change in the current trajectory.
Bitcoin Strong Fundamentals And Trustworthy Nature
When examining Bitcoin’s price history in a logarithmic format, illustrated in the chart below, which adjusts for its parabolic growth, a clear cyclical pattern emerges. Despite short-term volatility, Bitcoin’s long-term trend has shown a consistent upward trajectory, especially when viewed over a period of 15 years.
This pattern contrasts with cryptocurrencies like XRP, which have experienced more pronounced unpredictability due to factors like regulatory challenges and market competition.
Bitcoin’s predictability is not just a function of its market behavior but also a result of its solid fundamentals.
The combination of finite supply, halving events, network effects, and continuous technological improvements create a foundation that can lead to somewhat predictable growth cycles. Investors who “zoom out” often see these patterns as evidence of Bitcoin’s resilience and potential for future appreciation.
Investors and traders should note that while historical patterns can provide insights, they are not a guarantee of future performance. Continuous monitoring of market conditions, sentiment, and other technical indicators is important for making informed trading decisions.
Conclusion
In conclusion, the XRP/BTC pair has shown a persistent downward trend since 2018, as evidenced by the XRP price registering lower highs and lower lows vs BTC, with the RSI also confirming a continuation of this bearish momentum.
Despite occasional XRP pumps, the trend points toward further depreciation of the XRP price vs BTC, and the substantial resistance level established over four years implies significant challenge ahead for XRP if it wishes to remain competitive in the crypto space. This bear outlook for XRP prompts a reflection on Ripple’s fundamentals as we move forward.
Will an improvement in Ripple’s underlying fundamentals be enough to reverse the downtrend and start a sustainable rally for XRP, in 2024, or will Bitcoin’s dominance continue to overshadow Ripple’s gains?
FAQs
Recent XRP pumps have been weak, hinting at diminishing investor confidence compared to BTC’s consistent store of value. Historical trends suggest BTC has been a stronger hold, with XRP showing a persistent decline in comparative value. Overcoming the downtrend would require significant shifts in market dynamics or Ripple’s fundamentals to trigger a bullish reversalWhat do recent pumps suggest about XRP's performance?
Is it better to hold XRP or BTC based on historical trends?
Can XRP overcome its downtrend against BTC?
