Traders Should Avoid Being Victimized By XRP Coin

If you’ve gotten hurt in XRP (CCC:XRP-USD), you’re not alone. But with digital currencies under increased pressure, poor prospects off and on the price chart and an ambulance-chasing lawyer on the scene, letting  XRP coin further victimize your trading account is a big mistake. Let me explain.

A concept token for XRP (XRP) with stacks of tokens in the background.
Source: Shutterstock

It’s a bad day for cryptos of all kinds. From Bitcoin (CCC:BTC-USD) and the market’s largest coin by valuation, to up-and-coming must-own Polygon (CCC:MATIC-USD) or comedic-value, meme-traded favorite Dogecoin (CCC:DOGE-USD), casualties abound within a decentralized finance (DeFi) universe upward of 9,000 digital assets. And XRP coin isn’t immune.

Amid Thursday’s higher profile losses ranging from roughly 3.50% in BTC to more than 7% in blockchain heavyweight Ethereum (CCC:ETH-USD), XRP is in the middle of the pack shedding about 4.50%. No need to be overly-alarmed, there’s a bad actor to blame, right? Correct, well kind of.

XRP, Ripple and China

Blameful fingers are once again pointed at China. And for good reason as the country’s dogged war against the emerging digital market escalated to new heights this week.

The country’s central bank is set to shut down a software company suspected of providing crypto-related transaction services. It’s the first such action being taken following multiple warnings by regulators.

But XRP has other problems specific to Ripple and to itself. What?

Many investors view XRP as synonymous with Ripple, but they’re not the same. Ripple is short for RippleNet and what’s become an increasingly popular platform for international payments.

Among those partnering with RippleNet are Bank of America (NYSE:BAC), the United States second largest financial institution by assets, and fellow industry blue-chip American Express (NYSE:AXP). RippleNet is big and growing and taking aim at SWIFT, the method banks have traditionally used for international money transfers.

More About XRP

Then there’s XRP, the original digital coin developed by Ripple’s owner Ripple Labs. And today, while XRP can be used on Ripple, it’s outdated technology offers less utility than newer coins from Ripple Labs. In fact, Ripple Labs has all but moved on with other digital assets affording faster and cheaper transactions in building out RippleNet.

Aside from crypto’s broader threat and XRP’s inherently weaker value to Ripple and its customers, XRP remains in the crosshairs of the Securities and Exchange Commission. U.S. regulators are investigating whether XRP is an unregistered security. The reason is its supply, unlike other open-sourced digital coins, is controlled by Ripple Labs.

At best XRP is facing an uphill battle. And with a Florida-based personal injury attorney at the scene of the purported crime, the government having until mid-October to reach “expert” discovery and given the circumstantial evidence on XRP coin’s price, a verdict of foul play has already been handed out.

Ripple’s XRP Weekly Price Chart

XRP (CCC:XRP-USD) bearish failure indicates further losses in XRP coin

Source: Charts by TradingView

It doesn’t take Matlock to view XRP’s weekly price chart and realize that cheaper doesn’t always indicate value. The writing has been on the wall since the coin’s failure to hit new highs this spring. And that writing continues to spell trouble for XRP bulls.

What is the digital coin’s latest sign of weakness? A failure to hold relatively deeper corrective testing of a key support area.

Prior key highs from late November and February, combined with a building trend and 62% retracement level, were unsuccessful in helping XRP find a bottom this past month. And barring the token reclaiming $1 on the weekly time frame, it’s a problem.

Bottom line and given the evidence, both off and on the price chart, XRP looks like a lost cause. It’s speculative at best. What’s the real upside in a modest risk allocation of XRP coin going to get you? Likely, not very much.

On the date of publication, Chris Tyler holds (either directly or indirectly) positions in Grayscale Bitcoin (GBTC), Grayscale Ethereum and Ethereum Classic Trust (ETHE, ETCG) securities. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Chris Tyler is a former floor-based, derivatives market maker on the American and Pacific exchanges. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits

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