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XRP Price Below $0.60 Despite Ripple Stablecoin Announcement

Published April 5, 2024 1:32 PM
Valdrin Tahiri
Published April 5, 2024 1:32 PM
By Valdrin Tahiri
Verified by Peter Henn

Key Takeaways

  • Ripple announced its stablecoin on April 4.
  • The XRP price continues to trade below $0.60.
  • Why did XRP not bounce following the announcement?

Ripple announced its entry into the $150 billion stablecoin market on April 4, revealing a stablecoin launch by the end of the year. Despite the positive announcement, the XRP price continues to struggle below its main resistance level.

The price has been consolidating for nearly a year, causing investors to become impatient due to the lack of volatility.

What is Ripple’s Stablecoin?

On April 4, Ripple announced the launch of its stablecoin which is pegged 1:1 to the US dollar. The stablecoin will be backed  by US dollar deposits, government treasuries and other cash equivalents. Ripple has pledged to give monthly attestations that the collateral backing the stablecoin is in place.

Ripple’s CEO Brad Garlinghouse said that this is the natural next step for Ripple to bridge the gap between crypto and traditional finance. The stablecoin will debut on the XRP Ledger (XRPL) and Ethereum blockchains. It has plans to expand to various DeFi protocols over time.

Its main benefits will include its transparent reserve, multichain compatibility and being an enterprise-grade solution. Ripple’s stablecoin is expected to further contribute to the XRPL ecosystem.

While there is no exact date as to when the stablecoin will launch, it is expected to do so later in 2024 if it passes regulatory approval. Despite the positive announcement, there was no discernible effect on the XRP price.

XRP Price Prediction: When Will Volatility Return?

The weekly time frame technical analysis shows the XRP price has increased alongside a long-term ascending support trend line since October 2022. The trend line has been validated numerous times (green icons).

While the XRP price reached a high of $0.94 in July, it has fallen since. During this time, it validated the $0.75 horizontal area, creating long upper wicks. These are potential signs of selling pressure (red icons).

Today, the XRP price fell below $0.60.

XRP Price Struggles Below $0.60
XRP/USDT Weekly Chart | Credit : TradingView

Combined with the ascending support trend line, the $0.75 area creates an ascending triangle, considered a bullish pattern. However, both the RSI and MACD give neutral readings. The RSI is at 50 while the MACD is close to 0.

As a result, it is possible the XRP price will consolidate between the ascending support trend line and the $0.75 area in the near future. The trend line is currently at $0.55.

Then, whether the price breaks out from the $0.75 area or falls below the long-term trend line will determine the future trend.

XRP Could Continue Consolidating

Despite the positive announcement, the XRP price action and indicator readings suggest that more consolidation is in store. The future trend will likely include further trading between the $0.60 and $0.75 levels.

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