Ripple’s XRP has encountered a difficult year, experiencing a steady decline against Bitcoin over the past 12 months. This prolonged slump is marked by its record-breaking 12th consecutive monthly red candle against Bitcoin. Although XRP stands out as one of the few cryptocurrencies with a legal status, it seems to confuse investors and other industry players as being a good investment because of its poor market performance.
Recent analysis shows this understanding of XRP and its legal status leaning on the one hand and the price dynamics on the other. Market commentator, Mr. Huber noted that XRP is one of the few cryptocurrencies with legal certainty but has been in a constant depreciation trend. This observation brings to light a crucial issue: The court ruling can never be an indicator of the market success of any instrument.
Legal Clarity vs. Market Performance
Adding to the discussion, David “JoelKatz” Schwartz, Ripple’s Chief Technology Officer, recently commented on X; he further noted that it still costs $1 to buy enough XRP to make a $1 payment. This statement emphasizes that payment is possible using XRP but does not add any value and is very slow. Even when the legal system provides a green light for implementation, the XRP has issues regarding the exceptionally high costs of transactions.
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While some remain optimistic due to its legal clarity, others are skeptical because of its poor performance and high transaction costs. Legal wins, such as those achieved by Judge Torres, have not translated into market gains. These legal wins are, therefore, lost in practical hurdles of using XRP for payments, which steer potential users and investors away.
Even technically, when looking at the long-term chart of XRP/BTC, it is tough to speak about all the seven indicators successfully. From the chart in TradingView, there is a clear bearish outlook in the longer time frame, with RSI depicting that the market is oversold. With the RSI close to 37.26, the asset appears undervalued, potentially suggesting a rebound. However, the overall trend remains bearish, affirming the negative sentiment expressed by analysts and the community.
In conclusion, XRP’s legal clarity has not boosted its market performance. High transaction costs and continuous decline against Bitcoin have overshadowed its legal victories. The practical challenges in using XRP for payments continue to erode confidence among investors and potential users.
Also Read: Financial Analyst Peter Schiff Foresees Troubles for Bitcoin ETF Investors Amid Price Declines
Maxwell Mutuma
Maxwell is a crypto-economic analyst and Blockchain enthusiast, passionate about helping people understand the potential of decentralized technology. He writes extensively on topics such as blockchain, cryptocurrency, tokens, and more for top publications such as Coingape, Coin Edition, and The Coin Republic. His goal is to spread knowledge about this revolutionary technology and its implications for economic freedom and social good.