Ripple's report reveals a real use case for XRP and other major cryptocurrencies
- Cryptocurrencies are increasingly used for lending and borrowing purposes.
- XRP/USD needs to regain $0.2400 to improve its short-term technical picture.
Ripple's XRP, the third-largest digital asset with the current market value of $10 billion, is changing hands at $0.2284, down from the intraday high of $0.2334. XRP/USD has gained over 3.5% in recent 24 hours in line with the global sentiments improvement on the cryptocurrency market.
Ripple found a use case for cryptocurrencies
Cryptocurrency-based lending may become a strong use case for digital assets, according to the latest report published by Ripple.
The San Francisco-based fintech startup released its Q4 XRP Markets report with the latest trends and developments that showed significant growth of borrowing and lending in digital assets through the past year. Now, this market is estimated as a $5 billion industry.
According to the research, low-interest rates in fiat currencies was one of the key catalysts behind the growth. Also, the researchers noted that cryptocurrency holders were increasingly looking for ways to put their assets to work.
While concerns over a “crypto credit bubble” have started to emerge, the growth potential for this market remains substantial into this year and beyond.
The same view is shared by Graychain. The company's report on the crypto credit industry revealed that the number of new loans in digital assets spiked by 239% from5,462 in the first quarter of 2019 to 18,562 in the second quarter. The industry is dominated by Genesis and Celsius with their combined market share 65%. Both platforms allow borrowing and lending in XRP alongside some other popular coins.
XRP/USD: technical picture
On the intraday level, the initial resistance is created by SMA200 1-hour on approach to $0.2300. Once it is out of the way, the upside momentum may gain traction with the next target of $0.2334 (intraday high) and $0.2400 (the previous consolidation border). A sustainable move above $0.2400 barrier wil improve the technical picture and bring $0.2500 and $0.2540 (2020 high) back into focus.
On the downside, the local support is created by a combination of SMA100 and SMA200 on 1-hour chart at $0.2230. If it is broken, the sell-off may be extended towards $0.2200 and $0.2136, which is the lowest level of the previous week.
XRP/USD, 1-hour
Author
Tanya Abrosimova
Independent Analyst
