XRP Utility Strong, But Price Faces Bearish Pressure
Key Takeaways
- XRP serves specific functions within the Ripple network, such as acting as a bridge currency for cross-border payments.
- Despite these real-world use cases, the price is under pressure – it has dropped by approximately 8% over the past seven days.
- Technical indicators suggest a potential price correction if key support levels are breached.
- A breakout above USD 2.26, however, could trigger renewed upward momentum.
Value Through Utility – Not Hype
XRP is more than just a speculative asset. According to a recent report by Bitwise Investments, the token’s value is rooted in specific functions within the XRP Ledger. These include:
- Transaction Fees: These are permanently burned, creating a long-term deflationary effect.
- Reserve Requirements: These help prevent spam on the network by requiring a minimum amount of XRP for transactions.
- Bridge Function: XRP acts as an intermediary currency for international transfers, enabling efficient liquidity provision.
These mechanisms show that XRP plays a clear role in the blockchain ecosystem. Its utility increases with growing network usage. However, this fundamental value is currently not reflected in its market price.
Sell Signals Dominate the Market
Despite its functional strengths, XRP is currently experiencing a rise in short positions. Data from Coinglass indicates that the long-to-short ratio has been steadily declining since the end of April. On May 6, it fell below 0.90 – a sign that many traders are betting on falling prices.
This trend points to growing market scepticism. Price movements are currently being driven more by speculative selling than by fundamental factors.
Chart Analysis: Key Levels to Watch
At the time of analysis, the XRP price was around USD 2.14. The Relative Strength Index (RSI) stood at 47.55 – a neutral value indicating neither overbought nor oversold conditions. The MACD (Moving Average Convergence Divergence) showed signs of a potential bearish crossover, signalling a possible downward move.
According to analyst Ali Martinez, two price levels are critical:
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- USD 2.00: A break below this support could trigger further losses.
- USD 2.26: A breakout above this resistance could pave the way for a new upward trend.
Our Assessment
XRP offers real-world use cases that could support long-term stability and demand. In the short term, however, its price is heavily influenced by market sentiment and speculative positioning. Those investing in or considering XRP should closely monitor key technical levels and be aware of current market uncertainty. A sustainable increase is only realistic if fundamental strength and market confidence begin to align again.
Sources
- Bitwise Investments
- Coinglass
- TradingView
| Symbol | XRP |
| Coin type | Alt Coin |
| Transaction Speed | High |
| Pros |
|
| Cons |
|
| Further practical applications | |
| Price | 2.22 |
| 24h % | 3.65 % |
| 7d % | -0.68 % |
| 30d % | 17.45 % |
| 60d % | -1.47 % |
| 1y % | 324.69 % |
| Official Links | Website |
| Socials | X |
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