- XRP stays firm above $0.45 amid strong bullish sentiments.
- The upside movement based on three maun factors.
XRP jumped to $0.4977 late on Thursday before retracing to $0.4536 by press time. The Ripple's cryptocurrency has been an unrivaled growth leader among top-10 coins with over 40% gains on a day-to-day basis. Both volatility and the trading volumes catapulted and reached the highest levels since January this year. Due to the substantial price increase, XRP's market value surpassed $18B, and came close to Ethereum's capitalization (currently at $22B). Notably, XRP added over $7B to its market cap just in three days.
From the longer point of view, XRP's weekly gains amounted to 64%, though it is still 76% lower than at the beginning of 2018.
Such strong movements are usually based on three components: fundamentals, technical factors and emotions or speculations. Let's see how XRP's uprise fits in.
1. Fundamentals. A slew of positive news created a favorable environment for the Ripple's cryptocurrency in September. Thus, the company managed to settle the dispute with Blockchain Consortium R3 and avoid tiresome and potentially costly litigation. Then, several days ago the Japanese financial giant SBI Holdings announced the Ripple-based MoneyTap launch, while British Transfer Go used Ripple's technology for cross-border payments and communications with Indian partners.
Apart from that, one of Ripple's top executives hinted that the company might launch xRapid service, based on digital currency as early as the next month. Later, a spokeswoman for the company clarified that there is no official timeline for xRapid commercial release, but the market had already gone wild by that time.
Partnership with the American PNC Bank iced the cake.
2. Technical factors. A sustainable movement above DMA50 (currently at $0.3265) created a strong bullish signal and attracted new buyers to the market as the coin has been trading below this level since the middle of May. Driving the bullish wave, XRP/USD managed to crack another critical resistance created by psychological $0.40 with DMA100 right above this level.
3. Emotional component. We are witnessing FOMO effect (fear of missing out) in full force. Traders are anxious to jump this bandwagon until its too late, adding bullish momentum to the price movement even if there are no new triggers for growth. However, this situation is potentially dangerous, as the disappointment and the subsequent sell-off may be as violent as the growth.
XRP/USD, a daily chart