The bearish sentiment in the overall crypto market continues to be weighing on Ripple’s XRP, keeping a trading close to the key $1 level as buyers stay out of the market into one more session early on Tuesday. At the time of writing, XRP/USD is trading at around $1.04.
Bearish Mood in Crypto Market Keeps Ripple’s XRP Under Pressure
There seems to be quite the sell-off underway across the board ever since market leader Bitcoin crashed under the $60,000 mark. However, analysts remain optimistic that a bull run could soon gather pace and ensue, powered by the rising mainstream adoption of cryptocurrencies worldwide. In the meantime, however, it means Ripple’s XRP and other leading cryptos continue to trade in the red with retail traders afraid to buy into the asset class momentarily.
One of the reasons for the bearish mood since the previous session is US President Joe Biden’s decision to renominate Jerome Powell as the Chairman of the Federal Reserve instead of picking alternatives who have a more crypto-friendly outlook. While some believe that a dovish Fed Chair could maintain worries about inflation and keep risky assets like cryptos bullish, his lukewarm attitude towards digital currencies could diffuse some enthusiasm among financial institutions looking to dip their toes into this space.
Can The Following Fundamentals Offer Support to XRP?
Beyond the overall market sentiment, the XRP token could find some support from recent analysis by JP Morgan which forecasts that a win for Ripple in the lawsuit against SEC could see adoption of the crypto skyrocket. RippleNet’s On-Demand Liquidity (ODL) has made quite the splash in recent months, supporting cross-border payments among leading financial institutions, especially in the MENA and APAC regions. However, businesses across the US have stayed away on account of the current legal uncertainties, which could reverse if the company registers a win.
Speaking of the lawsuit, the Amici Curiae Attorney, John Deaton, recently tweeted that he had objective empirical evidence which could prove that at least 60% of XRP holders were unaware of Ripple – the company behind the crypto, when they first invested in it. This could prove that the outcome of the Howey Test – used by the SEC to prove securities’ status for an asset, could fail to show that XRP’s community was “relying on the promises and inducements of a promoter or company they’re oblivious to.”
Meanwhile, the XRP Ledger has activated the Negative UNL amendment which will maintain the blockchain’s resilience even when multiple validators remain offline. The Negative UNL (Unique Node List) is part of its consensus mechanism, which can maintain the network’s effective functioning even in times of a partial outage which could take down several validators. According to the XRPL Foundation, While we continue to expect high performance levels from validators on our UNL, this provides additional safety when validators are offline for any reason.”
XRP/USD Technical Analysis
On the H4 price chart of XRP/USD, moving averages along with leading technical indicators MACD and momentum signal a strong bearish bias. XRP’s price remains well below the pivot point at $1.09 but is holding above the immediate support at $0.97.
Ripple’s XRP can remain above the $1 level so long as further selling pressure does not build up. A worsening of market sentiment, on the other hand, could see the cryptocurrency break down under the key $1 mark and head towards testing the support level.