The price of XRP has encountered a slowdown this year, even amid significant developments such as the conclusion of the SEC lawsuit.
On Friday, Ripple (XRP) was priced at $2, marking a 41% decline from its peak this year, resulting in a market cap shrink from $190 billion to $118 billion.
Nonetheless, the likelihood of XRP surpassing Ethereum (ETH) is increasing, especially as Ethereum has seen its price drop by over 61%. As anticipated, predictions suggest that Ether may plummet below $1,000 within this year.
This year’s fluctuations have reduced the gap between the market caps of the two cryptocurrencies to just $45 billion. Here are some key factors that could propel XRP ahead of Ethereum in valuation.
Expansion of the XRP Ledger
The primary catalyst that could elevate XRP is the XRP Ledger network, a decentralized and open-source platform designed for rapid and economical transactions. Its transaction speeds and fees are more competitive than those offered by Ethereum.
Two potential developments could enhance the XRP Ledger network. Firstly, Ripple Labs recently acquired Hidden Road in a deal valued at $1.25 billion. This acquisition is noteworthy as Hidden Road processes over $10 billion daily.
Consequently, Ripple Labs is likely to transfer this payment infrastructure to the XRP Ledger, potentially establishing it as one of the most utilized networks in the crypto space.
Furthermore, Brad Garlinghouse has articulated his vision for Ripple to compete with SWIFT, the global payment network that processes transactions exceeding $150 trillion annually. The cessation of the SEC case could make this disruption more attainable.
Garlinghouse contends that Ripple’s technology presents advantages in speed and cost over SWIFT. Successfully implementing this could enhance XRP Ledger activity and foster long-term price appreciation.
These developments come at a time when Ethereum’s core network is experiencing stagnation and increased reliance on alternative layer-2 solutions.
Prospects for XRP ETF Approval
Another significant catalyst is the potential approval of an XRP ETF by the Securities and Exchange Commission. The odds of such approval have risen to 76% on Polymarket, reflecting strong market sentiment.
Approval could generate heightened demand from institutional investors. Analysts at JPMorgan estimate that these ETFs might attract $8 billion in inflows during their first year, likely boosting XRP’s price.
In contrast, all spot Ethereum ETFs have only accumulated a total of $2.6 billion in inflows since September, with recent trends indicating increasing outflows.
Favorable Technicals for XRP
The technical outlook for Ethereum appears weak, having formed a triple-top and a death cross pattern, signaling potential further declines.
In contrast, XRP shows technical support suggesting a possible recovery. On the weekly chart, it has pulled back and retested the $2 level, which represents the upper boundary of a cup and handle pattern, typically seen as a bullish continuation signal.
XRP has also maintained positions above its 50-week and 100-week moving averages. Should the momentum persist, it could retrace to the year-to-date high of $3.4, potentially advancing to the $3.70 target of the cup and handle pattern, and eventually reaching $5 over time.