Ripple (XRP) has been moving lately, along with a recovery in altcoins and an indecisive Bitcoin. But does the digital asset have a unique risk profile that may take it further up? XRP already grew by more than 15% in the past day, to $0.85.
Here are five reasons why XRP may be set at least for a rally in the short term:
Breaking Over $1 Again: This milestone price has been elusive to XRP in the disastrous first quarter. But now, as the price grows by the day, the level of $0.85 seems quite close to recovering that milestone. As automated trading sets the pace, levels near $1 may be quickly achieved. For XRP, the price predictions of $5 in the first quarter did not materialize, but the asset has shown it can, at least briefly, trade above $4.
Bitcoin Stagnating: One thing is certain, a lot of traders are into the crypto market for the fast appreciation of the assets. While Bitcoin still commands a relatively high price, XRP has a bigger potential for growth, at least in the short term. XRP is an asset that is widely traded and has gained the spotlight, and may be the go-to choice for short term gains, or a bet on further appreciation.
A Lot of XRP Sits on Exchanges: Without a proprietary wallet, a lot of XRP sits on exchanges, for trading. This also means that everyone is awaiting the opportunity, and there would be plenty of inflows from Bitcoin into XRP, as well as plenty of sellers. The recent lows have ensured that a new batch of investors bought at the bottom. XRP volumes have shown they can pick up from almost nothing to sky-high levels overnight.
Annual Cycle Repeats: Last year, May saw the crypto market pick up, with an unprecedented interest in altcoins. At that time, XRP just broke above 1 cent. If XRP breaks the $1 levels, after all fluctuations, it would still present a 100-fold gain for a lot of investors. At the current prices, it would be unusual for XRP to grow another 100 times, but it may still stage robust rallies against BTC.
Renewed Hopes of Displacing Bitcoin: Despite the talks that Bitcoin would be the only necessary crypto coin with all the features built in, there are still projects aiming to usurp the leading position. XRP has seen some bad publicity, and there are the warnings that it is highly improbable banks will buy the coin on the open market to use in their transactions, especially if its price appreciates so fast.