- Analysts predict a 30% drop for XRP after losing important support.
- Xpring report reveals that XRP is being used as a medium of exchange, especially among Ethereum (ETH) users.
Despite its recovery in recent days, the crypto market has also seen an increase in volatility. In the top 10 cryptocurrencies, Bitcoin has had the biggest gains with 10% and 36.94% in the weekly and monthly charts. Altcoins have struggled to follow Bitcoin gains as the first cryptocurrency by market capitalization struggles to break the important $10.000 mark.
XRP could test new lows
In the top 10, only Ethereum and Tezos are close to BTC gains in the monthly chart, but in the weekly chart they show only slight gains. The asset with the worst weekly performance is XRP with a 6.27% loss. As reported by CNF, BTC’s performance over the past few days outlines a bullish outlook for Bitcoin. However, the formation of a golden cross on the BTC chart indicates to analysts that the future for altcoins might be bearish. In that sense, XRP has fallen below important support levels.
At the time of publication, XRP is trading at $0.20 with gains of 0.41% in the last 24 hours. According to trader Nik Patel:
(…) market structure has recently broken and turned bearish. This break and turn occurred from an important area also: the 200-day moving average. If we start to see price reject from a retest of the underside of this area, I am expecting a swift move below $0.175 and then a retest of the range low at $0.125. Break back above it and I will look for longs, ideally with price closing above the 200DMA and then retesting it as support.
Patel’s prediction is shared by Bitazu Capital’s founding partner, Mohit Sorout. On his Twitter account, Sorout and Patel agree that XRP could lose nearly 30% of its value. Sorout predicts this will likely happen before the end of June.
ETH/XRP correlation for value transfer
On the other hand, an Xpring report reveals the predominant use case of XRP. According to the report, the digital asset has found adoption by users of Bitcoin and Ethereum, especially those of the latter, to make balance transfers in exchanges.
Likewise, the report concludes that the increase in tariffs and the price of gas on the Ethereum network has a direct relationship with the increase in transactions between exchanges using XRP, as shown in the image below:
When ETH cost per transaction is higher, there are also more XRP cross-exchange transactions. This is especially true for days when ETH cost levels indicate severe network congestion (…). Overall, higher Ethereum fees correlate with higher volumes in XRP (Pearson’s R = 0.7, statistically this is a meaningfully strong positive correlation). For example, on March 12, 2020, Ethereum transaction fees rose over 400%. That same day, XRP cross-exchange transactions rose 226%.
