Ripple (XRP) has reportedly begun talks with the New Zealand government to collaborate on a Central Bank Digital Currency (CBDC) project. This development comes shortly after Ripple’s significant victory against the Securities and Exchange Commission (SEC), leading to a boost in the global adoption of XRP. This article examines whether this progress is sufficient to forecast another triple-digit price increase for XRP.
Securing a Landmark Victory over the SEC
One month following Ripple’s triumphant legal battle against the SEC, XRP’s global adoption has seen a steady and persistent rise. Notably, Ripple is currently engaging the New Zealand government in talks for possible collaboration on a CBDC project.
This move marks another country, alongside Colombia and Palau (Western Pacific Island state), expressing interest in Ripple’s platform for releasing a CBDC. The given on-chain analysis seeks to comprehend the network effects to determine if the growth in adoption can justify another $1 surge in XRP’s price.
A Rising Tide of Global Adoption
Noteworthy on-chain trends from August validate the recent coverage of XRP’s global adoption increase. Specifically, data from Santiment shows that XRP has seen consistent spikes in Daily Active Addresses (DAA).
- In the last 16 trading days since July 31, XRP attracted over 100,000 active users on at least 12 days.
- For context, before July 31, XRP had attracted 100,000 DAA in only 15 days, sporadically, since the beginning of 2023.
The DAA data trend measures the daily count of active network participants performing transactions. Consequently, increasing DAA indicates growing demand as well as transactional activity across the blockchain network.
Remarkably, in the last 4 months, XRP’s price typically rallied whenever the DAA crossed the 100,000-mark. If this historical pattern continues, it could validate the forecast of another XRP price rise in the forthcoming weeks.
Bulls Gain Momentum
Data from the Relative Strength Index suggests that the XRP bulls have pulled ahead after the initial uninspiring start to the month. As shown in the graph below, XRP fell from 55.6 to 41.72 in the first week of August. However, between August 7 and August 15, there has been a slight increase in XRP’s RSI from 41.72 to 43.5.
The Relative Strength Index data assesses the strength and momentum of a digital asset’s price trend. A rising RSI within the neutral zone indicates a growing accumulation trend. Considering that XRP’s current RSI is not overbought, there is room for a substantial price surge if the existing positive momentum further strengthens.
In conclusion, the consistent rise in XRP adoption and network activity suggests a market sentiment shift in favor of the bulls.
Price Prediction: Bulls Could Push XRP Price to $0.80
If the increased network demand persists, XRP’s price could reach the $0.80 milestone during its next bull rally. This assertion is validated by the MVRV ratio, which assesses the net-financial position of current XRP holders.
- As the graph below reveals, most investors who purchased XRP in the last 30 days currently face around 9% unrealized loss.
- Based on historical trends, investors would likely hold until the break-even point at the $0.69 mark.
- However, considering the expanding global adoption, the bulls could surpass that resistance to reclaim the $0.80 milestone.
Contrarily, the bears could foresee another negative XRP price forecast if it falls below $0.55. However, current holders would likely look to set up a buy wall around $0.59 to prevent losses exceeding 15%. For worst-case scenario, the XRP price could further decline to around $0.55 if the buy wall caves in – though, this is highly unlikely.