Ripple's $XRP has taken off post-Trump's electoral victory. Should you buy it?
I'd be hesitant to enter now. In fact, if you are currently holding some $XRP you might want to take a bit of profit.
Let's start with the obviously good developments.
Development 1: Positive Legal Developments in SEC Case
Ripple's ongoing legal battle with the U.S. Securities and Exchange Commission (SEC) shows signs of a favorable resolution, which could remove legal uncertainties and positively impact XRP's adoption and price.
We are likely to see news of this before the end of the month!
Development 2: Ripple's Stablecoin is Good
Ripple just launched RLUSD, a USD-backed stablecoin, on both XRP Ledger and Ethereum! Even better?
It’s approved by NY regulators, setting a new standard for transparency and trust. Tether's USDT cannot compete with this, meaning that RLUSD is positioned to eat into its market share.
Development 3: Speculation on XRP ETF Approval
There is growing speculation about the potential approval of an XRP Exchange-Traded Fund (ETF) in 2025, which could attract substantial institutional investment and boost XRP's market presence.
Eric Balchunas (the Bloomberg ETF specialist) suggested that this is likely to be approved before $SOL's ETF.
Why the caution with all this good news?
Here's the first reason.
$XRP is a large-cap coin. Typically, large caps do not move up as quickly as $XRP has -- the blue line at the bottom of the chart (historical volatility) shows you what's going on. Anything over 100 is anomalous for a coin this size ... suggesting a pull back.
The second reason is that the current price is some 63% above its 200-day moving average.
Even for a coin with its level of volatility, anything over 60% above the SMA 200 is a sign of a top.
That doesn't mean $XRP won't go up more, but in the near term, historical price action suggests an incoming decline.
Concluding Thoughts
First up, I'm not advising you to do anything. I'm only telling you about what the data suggest in an historical context. DYOR!
Second, if you are holding $XRP, the data suggest that you should take a bit of your earnings.
Third, if you are thinking about starting an $XRP position, the data suggest you'd be better served by waiting just a little bit--maybe to the end of the month when the SEC news is announced.
Overall, it is a great project ... just a bit pricy at this moment even for cryptos.
Happy Trading!
-Sebastian Purcell, PhD
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