Unraveling the Reasons Behind the Explanation for the Underperformance
The performance of Ripple’s XRP token has been lackluster compared to the broader cryptocurrency market this year. While Bitcoin has experienced a significant increase of nearly 50%, XRP has fallen by over 20% in 2024. This has resulted in XRP trailing behind other top ten cryptocurrencies such as Toncoin, Ethereum, and Binance Coin.
Over the past 12 months, XRP has only seen a modest rise of 1.6%, whereas Bitcoin has surged by more than 100%. This underperformance has been a source of frustration for long-term investors, especially when compared to meme coins like Floki, Pepe, Book of Meme, and Brett.
Despite the developers’ efforts to enhance its value, Ripple’s performance has continued to lag behind the market. One initiative they undertook was the launch of the XRPL EVM sidechain, which has the capacity to handle over 1,000 transactions per second. In a recent statement, the developers announced that they would be utilizing Axelar as the bridge protocol for the platform.
However, Ripple faces a challenge in the highly saturated and competitive EVM space. Many major networks, such as IOTA and EOS, have struggled to compete after transitioning to this space.
Another plan for Ripple is the introduction of its stablecoin, which will be pegged to the US dollar. Nevertheless, the stablecoin industry is fiercely competitive, and having a well-known brand name does not guarantee success. For instance, PayPal’s PYUSD has a market cap of $414 million, making it much smaller than USD Coin and Tether.
The underperformance of XRP’s price can be attributed to weak demand among traders and users. Most crypto traders are currently focused on meme coins like Pepe, Book of Meme, and Brett. Furthermore, on-chain metrics indicate a significant decline in the number of active accounts and transactions this year.
Additionally, Ripple has struggled to onboard many financial services companies to utilize its platform, even after its legal victory against the SEC last year. Analysts are questioning whether there is a strong demand for Ripple’s On Demand Liquidity (ODL) solution, especially when banks like JPMorgan and ANZ are testing their own tokenization products.
In summary, Ripple’s XRP token has underperformed due to weak demand from traders and institutions. Furthermore, there are doubts about the success of its growth initiatives, such as EVM and stablecoins.
Looking at XRP’s price forecast, one of the reasons for its decline is the formation of a double-top pattern at $0.7484, which was its highest point on November 13th and March 13th. In price action analysis, a double-top pattern is considered one of the most bearish signals in the market. Currently, the token has moved slightly above its neckline at $0.4872.
Furthermore, Ripple formed a death cross on April 14th when the 200-day and 50-day Exponential Moving Averages (EMA) intersected. As a result, despite the recent rebound in the past two days, XRP’s outlook remains bearish. The initial target to monitor is at $0.4872, and a drop below that level could indicate further downside with sellers targeting the next support at $0.4557.
