Ripple’s Token Sees Recovery After Bottoming Out

On October 3, Ripple’s token reached a low of $0.5078 but has since recovered, trading at $0.5500. This brings Ripple’s market capitalization to $31.2 billion, positioning it as the seventh-largest cryptocurrency.

Despite this recovery, XRP has underperformed compared to other cryptocurrencies, declining by 6.3% this year. In contrast, Bitcoin has surged by 54.4%, and Pepe has seen a remarkable increase of nearly 800%.

Significant Milestones for Ripple in 2023

Ripple has achieved several notable milestones this year. One of the most significant was the resolution of its long-standing lawsuit with the Securities and Exchange Commission (SEC), resulting in a fine of just $125 million, far less than the originally requested $2 billion.

Additionally, Ripple has launched its new US dollar stablecoin, RLUSD, aiming to compete with established players like Tether, Circle, and PayPal. Initially, the stablecoin will be available on platforms such as Uphold, Bitstamp, and MoonPay.

The Business of Stablecoins

Stablecoins have proven to be a lucrative business model within financial services. For example, Tether’s recent earnings filings revealed it to be more profitable than Blackrock, which manages assets worth over $11 trillion. Stablecoin issuers typically generate revenue by investing their funds in low-risk assets like Treasuries. However, new issuers face the challenge of competing with Tether, which boasts $120 billion in assets. In comparison, PayPal’s PYUSD has assets totaling $632 million, making it the ninth-largest stablecoin.

XRP Ledger: A Look at the Numbers

Ripple has also introduced the XRP Ledger, an open-source blockchain designed to offer a superior alternative to Ethereum and Solana. While it initially showed strong growth, the total value locked in the network has stagnated at around $14.6 million. However, recent data from Santiment indicates an increase in the number of wallets on the chain.

XRP Ledger has spiked in active wallets significantly, reaching 35,799 unique wallets making at least one transfer in a single day, the highest in over 3 months. Additionally, 3,858 new wallets were created in a single day, the highest amount in over 7 months!

These metrics suggest growing interest and adoption of the XRP Ledger, despite the overall stagnation in total value locked.

Technical Analysis: Bearish Signals for XRP

On the technical front, XRP has shown gradual growth this month. However, it remains below the Ichimoku cloud on the daily chart, a bearish indicator. The token has also formed a bearish flag pattern, characterized by a long flagpole and a flag-like pattern, which resembles a rising wedge—another bearish signal.

Additionally, XRP is trading below the 50-day moving average and has formed a double-top pattern at $0.6592. Given these indicators, a bearish breakout is likely in the near term. If this occurs, the next critical level to watch will be $0.5021, the neckline of the double-top pattern, which is 8.50% below the current price.

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