Ripple’s controversial native token XRP closed 2019 at a substantial loss, but according to a prominent analyst, the cryptocurrency is ready to break the bearish jinx in 2020.
Crypto Michaël, a popular cryptocurrency analyst on Twitter, spoke about this on Wednesday, saying that the XRP-to-dollar exchange could undergo a massive trend reversal this year. The top crypto trader predicted a 175 percent rebound for the pair after taking cues from its historical trading data, as shown in the chart below.
He pitted XRP’s current price action against a similar bout of trading seen between Q4/2015 and Q4/2016. Back then, the coin had undergone a deep downside correction, with its price dipping from $0.025 to $0.0041 in a 12 month period. Crypto Michaël also noted that XRP posted a similarly bearish move in 2019, now ranging in a potential reversal area.
“Massive downtrends ready to be broken down,” he tweeted. “This could give a target for $XRP of $0.48, a potential rise of 175% from here.”
XRP Stuck in Bout of Sideways Trading
Before the big breakout, Crypto Michaël expected XRP to trend sideways in a range defined by $0.166 as support and $0.254 as resistance.
The flat move appeared to be reminiscent of XRP’s 2015-2016 price action, wherein it trended similarly in a strict area defined by $0.004 support and $0.005 resistance. The sideways momentum lasted for less than six months before XRP broke out to the upside and established a new high of $0.009 – a 125 percent gain.
Still seeing many similarities to the period in December ’15.
Massive downtrends ready to be broken down.
— Crypto Michaël (@CryptoMichNL) December 31, 2019
In the current scenario, a breakout above the $0.245 resistance could pave a clear price rally towards $0.48, according to Crypto Michaël. The bullish target coincides with one of the falling trendline resistances formed during the ongoing XRP’s downtrend.
Weak Fundamentals May Hamper Any Rally
The bullish prediction comes at a time when Ripple Labs is battling a massive bout of FUD. The San Francisco-based company, which allows clients to use XRP as a settlement token for cross border money transfers, sold $1.2 billion worth of XRP in 2019.
The move did not sit well with the Ripple investors, many of whom interpreted the massive token selling as efforts to bring the XRP rates down. What further worsened the matter was XRP’s underperformance in 2019 – against the US dollar as well as the benchmark cryptocurrency Bitcoin.
Moreover, Ripple Labs entered major partnerships with some of the world’s biggest banks, bought stakes in remittance platform MoneyGram, and raised an additional $200 million in the latest funding. But none of the advancements guaranteed growth for XRP and its long-term holder base.
“XRP, like almost all ICO coins, doesn’t need to exist and gives you no real rights to anything. Its purpose is to make Ripple money, by selling it to suckers,” tweeted Peter Todd, a cryptographic consultant.
I’ve actually done some due diligence work for clients on Ripple technology, and the people I talked too were reasonable enough and the tech potentially had value as a backend to some centralized banking systems.
None of those cases were going to actually use XRP.
— Peter Todd (@peterktodd) December 21, 2019
That said, technicals alone seem inadequate to pump the Ripple token by 175 percent. It would need trust from its investors, which is currently one thing that the cryptocurrency is severely lacking.