XRP price rises ahead of RLUSD launch, but a reversal is possible

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As a seasoned crypto investor with a knack for recognizing trends and potential risks, I find myself both excited and cautious about the latest surge in XRP prices. Having witnessed the rollercoaster ride that is the cryptocurrency market, I’ve learned to appreciate the importance of both opportunity and caution.

The cost of XRP kept climbing, making it one of the top-tier cryptocurrencies with the strongest performance in the current market.

On December 10, XRP’s value dipped to approximately $1.9065, marking a low point. However, since then, it has been on an upward trajectory, recording a jump of more than 12% today, extending its uptrend.

The event transpired following Brad Garlinghouse, head of Ripple, disclosing that their company would unveil the RLUSD stablecoin on December 17th. This new coin will first become available on significant trading platforms like Uphold, Bitstamp, MoonPay, and more at launch.

After receiving approval from New York regulators following a lengthy review, Ripple developers are now moving forward with the launch. The goal for Ripple Labs is to establish RLUSD as a major contender within the stablecoin market by providing top-tier business solutions.

Furthermore, Ripple anticipates that RLUSD will work alongside XRP, aiming to enhance the number of cross-border transactions in the approaching months.

Despite current progress, RLUSD could potentially encounter significant challenges down the line. The most formidable threat is that it might struggle to gain user adoption. History shows us that even some well-established company’s stablecoins haven’t managed to capture widespread popularity in the past.

Since their respective launches in 2022 (Justin Sun’s USDD stablecoin) and 2023 (PayPal USD by PayPal), the market capitalization of the former has stayed approximately at $740 million, while the latter has faced challenges and holds around $458 million in assets.

Conversely, USDT (Tether) has seen its market presence expand significantly, with its market capitalization surging beyond $140 billion. Now, it’s the preferred stablecoin across the industry, commanding a dominant share of over 66% in the market.

XRP price chart points to potential risks

“Another possible threat to Ripple’s price could arise when users cash out on news. This refers to a scenario where investors purchase an asset in expectation of a significant event, only to sell it once the event occurs. A clear example is what transpired following the last Bitcoin (BTC) halving in April. In this instance, Bitcoin saw a surge before the halving and subsequently declined after the event took place.

For XRP, there’s a growing concern about a potential double-top pattern forming around the $2.90 mark. A double-top is a bearish chart configuration that usually signals a price drop. If this pattern holds true for XRP, it might reach $2.90, only to then fall back to its neckline at approximately $1.90.

Additionally, it’s possible that the value of the coin might undergo a trend reversal, with the price potentially decreasing to align closer with its significant moving averages. Notably, XRP is currently trading approximately 60% higher than its 50-day moving average, which suggests an increased probability of a price adjustment or correction.

Instead, if the price rises beyond the resistance level at $2.90, it would contradict the bearish prediction, potentially pushing XRP up towards the $5 mark.

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2024-12-17 16:46