XRP price loses its 25% month-long uptrend as Ripple CTO calls buyback proposal a “scam”

XRP price recovery over the month of January has been rather dull in comparison to the rest of the large-cap cryptocurrencies, such as Ethereum and Solana. To add to this slow rally, external developments surrounding Ripple have further made it difficult for the altcoin to continue its uptrend.

Controversy over the XRP buyback proposal cannot have helped. In a recent tweet, Ripple's Chief Technology Officer (CTO), David Schwartz, slammed the proposal, originally made by Ripple proponent Jimmy Valee of Vahil Capital, that one day XRP could replace the US Dollar as the world’s reserve currency due to a runaway global debt crisis.

Eventually, Valee estimates, XRP could be worth between $37,500 and $50,000 per token. Schwartz, in a tweet to Maverick_XRP, who asked for his thoughts on the buyback, said,

"I haven't looked at it very closely. But what I have seen looks an awful lot like a scam to me. If we've learned anything from 2012 and 2022 it's that anyone promising high returns with low risk is almost certainly going to rob you."  

The buyback theory, which has been floating around since 2021, sees a future in which governments around the world start buying back XRP from retail investors at a premium as a new reserve currency to replace the US Dollar in response to a spiraling global debt crisis.

Naysayer Schwartz, however, sees the proposal as a too-good-to-be-true scam, like that of 2012, presumably referring to the Bitcoin Savings and Trust scam, and Terra-UST and FTX in 2022

XRP price rise slows down

XRP price, since the beginning of the year, has managed to rise by a little over 25% before consolidating in the last two weeks. Moving between the resistance and support levels at $0.419 and $0.395, however, the altcoin lost its uptrend support and fell 3.04% in the last 24 hours.

Bulls may not have thrown in the towel yet, though, as the cryptocurrency has made a Golden Cross pattern on the daily price chart nearly 14 days ago. This happens when the 50-day Exponential Moving Average (EMA) crosses above the 200-day EMA. It suggests the cryptocurrency is set to maintain a bullish outlook for the next few weeks. 

Thus if  XRP price bounces off of its immediate support level at $0.395, and bulls manage to push the altcoin up by 5% to tag the resistance level at $0.419, there is a chance of recovery. Flipping that level into a support floor would allow buyers to reclaim the uptrend support and extend the rally to tag the critical resistance at $0.439.

XRP/USD 8-hour chart

Nevertheless, XRP price is equally vulnerable to falling through the immediate support level and down toward $0.371. Losing this support would bring the altcoin to critical handle at $0.349, marking a 12% decline. A daily candlestick close below this level would invalidate the bullish thesis, dragging the price to the 2023 lows of $0.334.