As I write this, Ripple’s (CCC:XRP-USD) XRP coin is down 6.6% during the last seven days at 57 cents. After its latest downtrend in worth, the crypto is a good distance from its prior highs. However in a latest publish, FXStreet steered XRP’s worth might go to $3.50 if it had been to carry a key support level.
Now, I’ll admit I’m no fan of technical evaluation — primarily as a result of I don’t have the endurance to know all these squiggly strains. That stated, I don’t have an issue if technical evaluation is your factor. I’ve seen loads of examples of the way it can work efficiently.
However given the downward course of most cryptocurrencies in the intervening time, a soar by greater than 500% within the subsequent few months appears extremely inconceivable.
Am I fallacious? Let’s take into account the probabilities.
The Case for $3.50 in Ripple Is Weak
Whether or not I’m finding out a inventory or a cryptocurrency, I like to think about the possibilities of one thing occurring. On this case, it’s the percentages of XRP hitting $3.50 in 2021.
On one event in Ripple’s nine-year existence, XRP hit a worth above $3. That was in January 2018, when it received as excessive as $3.84. The following-closest degree it climbed to was $1.96 in April 2021.
So, apart from one time greater than three years in the past, Ripple has traded effectively below $2. Based mostly on this info, I’d argue Ripple’s odds of attending to $2 this yr are twice pretty much as good as its odds of reaching $3.50.
However since XRP has already gained 150% in 2021 and cryptos are trending decrease, it appears unlikely that Ripple’s coin can mount such a monumental comeback.
InvestorPlace technical evaluation guru Bret Kenwell discussed Ripple on July 13. He steered that it has an honest chart and will transfer greater.
“Discover how [Ripple] rallied greater than 800% from the beginning of the yr to its highs in mid-April earlier than being decimated on the draw back. That stated, the crypto does have some positives regardless of being down 68% from the highs,” Kenwell wrote.
In the end although, Kenwell argued that the Bitcoins (CCC:BTC-USD) and Ethereums (CCC:ETH-USD) of the world will survive within the lengthy haul. That makes them probably the most smart crypto investments in a bear market.
Ought to XRP drop under its 50-cent help ranges, its worth might fall to the mid-30 cent-range very quickly. That’s a good distance from $3.50.
However All Hope Is Not Misplaced for $3.50
As my colleague identified, Ripple gained 800% between the beginning of 2021 and its mid-April excessive. If XRP had been to extend by the identical quantity, it could attain a worth of $5.17. That’s 47% greater than $3.50. So, sure, something is feasible.
Is it possible? That’s an entire completely different kettle of fish. I couldn’t presumably suggest somebody purchase XRP with this sort of near-term goal in thoughts.
Trying additional out, I might see $2 in 2022 and $3.50 in 2023. However that’s provided that cryptocurrencies generally drift greater in the course of the subsequent 30 months. If they continue to be caught in impartial or transfer backward, utility or no utility, XRP doesn’t stand an opportunity.
In late Could, I steered that speculative traders ought to buy Ripple under $1 as a result of I believed it couldn’t drop far more than it already had. On the time, the worth was round 97 cents. As a substitute, it’s managed to lose 40% of its worth within the seven weeks since.
“On the finish of April, when XRP was buying and selling round $1.36, I argued that it was due for a correction. This regardless of InvestorPlace’s William White offering readers with a number of skilled predictions of $2 or extra by the tip of the yr,” I wrote on Could 25. “I didn’t have any explicit inside scoop on Ripple. I merely felt it had gone too far, too quick.”
If you happen to’re a speculative investor, I’d argue that Ripple’s odds of falling by one other 36% are significantly greater than its odds of rising 75% to $1. I’d maintain off on shopping for XRP for just a few weeks till it and different cryptos regain their footing.
As for attending to $3.50, I don’t assume that’s within the playing cards for Ripple in 2021.
On the date of publication, Will Ashworth didn’t have (both straight or not directly) any positions within the securities talked about on this article. The opinions expressed on this article are these of the author, topic to the InvestorPlace.com Publishing Guidelines.
Will Ashworth has written about investments full-time since 2008. Publications the place he’s appeared embody InvestorPlace, The Motley Idiot Canada, Investopedia, Kiplinger, and several other others in each the U.S. and Canada. He notably enjoys creating mannequin portfolios that stand the check of time. He lives in Halifax, Nova Scotia. On the time of this writing Will Ashworth didn’t maintain a place in any of the aforementioned securities.