Ripple (XRP/USD) Tumbles on Questionable Bank Adoption
- Ripple’s XRP token has fallen as much as 35% from yesterday’s all-time high following criticism of its adoption.
- As Ripple's XRP token fades, traders are flocking back into Bitcoin.
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Ripple’s XRP token, formerly known as “Ripple” may have found a key resistance level as sellers have flooded the market. Less than 24 hours ago XRP/USD hit a record high of $3.31. The digital currency is currently as much as 35% off from that high.
The collapse in XRP/USD comes after Nathaniel Popper, a New York Times journalist and author of a popular Bitcoin book, sharply criticized the adoption of the currency. Popper claimed that banks are not adopting the tokens as a digital payment solution as Ripple contends. This directly impacts the credibility of the digital asset considering one of XRP’s major uses cases is so “banks can source liquidity on demand in real time without having to pre-fund accounts” as per their website.
Meanwhile, Ripple’s CEO, Brad Garlinghouse, has denied Popper’s claims stating, “Over the last few months I’ve spoken with ACTUAL banks and payment providers. They are indeed planning to use xRapid (our XRP liquidity product) in a serious way.”
Chart 1: XRP/USD 15-minute Chart (January 4 to 5, 2018)
So far, the market is not buying Garlinghouse’s counterclaims about XRP. At the time that this was written XRPUSD traded at around 2.54 which was about 17% higher than the bottom reached at 2.157. Still, the digital currency is down as much as 35% from yesterday’s high.
--- Written by Dylan Jusino, DailyFX Research and Christopher Vecchio, CFA, Senior Currency Strategist
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.