Three Reasons Why the XRP Price Is Stagnating

The price of Ripple (XRP) has not been performing as well as Bitcoin, Ethereum, or Cardano recently. In 2023, it increased by only about 13% overall.

In comparison, Bitcoin increased by over 30%, and Ether by almost 29%. With a market cap of more than $19 billion, Ripple remains the 6th largest cryptocurrency in the world.

Read more about the price of Ripple and discover the latest business news of the day with our companion app Born2Invest.

The legal battle between the SEC and Ripple: no end in sight

There are several reasons why the XRP price has not risen as much this year. But the most important of them is that this crypto project continues to be overshadowed by the legal dispute with the US Securities and Exchange Commission (SEC). This dispute has been going on for more than two years now. In its documents, the SEC accuses the company of collecting more than $1 billion in 2013 without registering the offered product as a security.

It is still unclear when the court case will conclude. Some analysts believe it can happen as early as the first half of the year. However, it is also likely that crypto investors are concerned about how the dispute will turn out.

Another challenge for Ripple is the growing popularity of stablecoins like Tether and USD Coin

Ripple has a special use case: it is a decentralized payment network, that works with banks and other financial service providers to offer a product called On-Demand Liquidity (ODL).

Companies can use ODL to facilitate cross-border transfers. Experts believe that such transactions will be replaced in the future by stablecoins, which are considered more secure. For example, the MoneyGram payment service has already started using USDC.

There is one more reason why the XRP price has faltered. Blockchain data shows that there have been fewer purchases of Ripple recently. In fact, Ripple Labs was one of the biggest buyers of XRP on the secondary market.

XRP Price Forecast

On the chart, it can be seen that the XRP price broke a strong resistance at $0.4323 on January 24. Since then, the uptrend that started at the beginning of the year has weakened. As a result, the price has also fallen below the lines of the moving averages of the last 25 and 50 days. It has also formed a small head and shoulders formation. However, the Ripple price is still above the ascending trend line shown in blue.

Overall, the outlook for Ripple remains bearish, with the next important price at $0.34, this is the one to keep an eye on. A move above the resistance at $0.4100 would mean that further price appreciation is possible.

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