- Ripple is reportedly in talks with the New Zealand government to launch its CBDC on the XRP Ledger.
- The XRP Network activity has shot up and the current RSI levels show that XRP is not in the overbought territory.
With the court ruling coming in favor of Ripple last month, a number of financial institutions have once again started looking at the Ripple solutions available in the market. Earlier this week, a report suggested that blockchain startup Ripple is currently engaging with the government of New Zealand and is in talks to collaborate on a CBDC project.
As we know, Ripple has been already working in this regard and building solutions. Earlier in May 2023, Ripple launched its CBDC platform offering governments a launchpad to launch their own central bank digital currencies (CBDCs).
BOOOOOOOOOM !!!!! 💣 #RIPPLE has been communicating with the RESERVE BANK 🏦 OF NEW ZEALAND 🇳🇿 for building CBDC’s utilizing the #XRPL. #XRP is taking over 🌐 globally and mass adoption is coming pic.twitter.com/ad7ikhPXWG
— EDO FARINA 🅧 XRP (@edward_farina) August 11, 2023
However, there’s not much info regarding how the New Zealand government plans to use the Ripple XRP Ledger. This would represent another nation, following in the footsteps of Colombia and the Western Pacific Island state of Palau, to exhibit an interest in Ripple’s CBDC-onboarding platform.
Following the Ripple court ruling, XRP entered into a strong price surge making over 80 percent gains in a week’s time and shooting past $0.90. However, post that, it entered significant retracement facing some selling pressure. As of press time, XRP is trading 4.43% down at a price of $0.59 with a market cap of $31 billion.
XRP Network Activity Shoots, Will Bulls Take Charge?
In August, critical on-chain data trends seem to support the recent media reports about XRP’s expanding global adoption. Notably, the provided Santiment chart indicates that XRP has experienced consistent and notable surges in Daily Active Addresses (DAA).
The chart illustrates that XRP has attracted over 100,000 active users in at least 12 out of the last 16 trading days since July 31. For context, before July 31, XRP had managed to attract 100,000 DAA only on 15 sporadic days since the beginning of 2023.
The Daily Active Addresses (DAA) data trend measures the number of active participants engaging in transactions on a daily basis. An increase in DAA indicates a growing demand and transactional activity across the blockchain network.
Notably, over the past 4 months, there has often been a price rally in XRP when DAA surpasses the 100,000 mark. If this historical pattern repeats itself, it could reinforce the anticipation of another XRP price rally in the upcoming weeks.
Based on the Relative Strength Index (RSI) data, it seems that the XRP bulls have made some progress after a less impressive beginning of the month. The chart below illustrates that XRP began declining from 55.6 to 41.72 during the initial week of August.
Nevertheless, between August 7 and August 15, the XRP RSI has slightly risen from 41.72 to 43.5. Considering that the XRP RSI is currently not close to an overbought level, there is potential for a substantial price increase if the positive momentum continues to grow.
Where’s XRP Price Moving Next?
Should the surge in network demand continue, it might propel the XRP price toward the $0.80 milestone during its upcoming bullish rally. This perspective is backed by the MVRV ratio, which assesses the financial status of present XRP holders.
As depicted in the graph below, most investors who acquired XRP in the last 30 days are currently facing a 9% unrealized loss. Drawing from historical patterns, these investors will probably hold until they recover around the $0.69 level once again.
Yet, given the expanding global adoption, the bulls could potentially overcome this resistance and regain the $0.80 milestone.
On the other hand, the XRP bears might influence a pessimistic price projection if it descends below $0.55. Nevertheless, current holders are likely to establish a protective barrier of around $0.59 to avoid incurring losses exceeding 15%.
While less probable, a scenario in which the XRP price dips further to $0.55 could unfold if that protective barrier weakens.
