XRP Price Analysis: XRP/USD Still Points to Another Drop, Despite Growing Asian Adoption Plans

  • There are a few confluences that still demonstrate vulnerabilities for XRP/USD.
  • Ripple are focused on Asian market expansion, but regulation clarity is key.

XRP Adoption in Asian Markets

Recently, the head of regulatory relations for Europe at Ripple was speaking on Asian market interest. Dan Moran said, “It’s very early days, but we see the biggest appetite in Asian markets, in terms of demand. So remittance demand, whether it is corridors that are under-served because correspondence banking is too costly. So, we feel that there is demand.” Further confirming to that point he added, “Liquidity, in terms of digital assets, most liquidity we have is in Asian markets by some distance.”

Dan Moran, was also commenting on the regulatory side of things, on how this can play a key role in Ripple’s expansion. “Regulatory certainty is the third factor. Again, we see a number of pockets around Asia where they are further ahead than we are her Thailand, I talked about. Obviously, Japan is another place. “I wouldn’t want to pin down exact markets, In Thailand, for instance, with that regulation, I think Siam Commercial Bank is really active now in terms of settlements, digital assets activity.”

Brad Garlinghouse on Asia

Elsewhere Ripple’s CEO was speaking at Singapore Fintech Festival 2018 recently. Brad Garlinghouse noted that he expects banks will start holding crypto assets, as they are losing out on business. He said “I think one of the things that will surprise us a year from now is that banks will be custodying digital assets directly.  

On the Asian market, Garlinghouse believes the first banks to offer crypto custody will be members of the Association of South Eastern Asian Nations (ASEAN). “I also predict it will be banks in the ASEAN markets. Where there is this regulatory clarity and there is a lot of progressive, forward thinking. They will be the first to actually allow for crypto assets custody in their accounts.”

The key tone as conveyed by Dan Moran, is on regulation. Brad Garlinghouse further added that “Regulatory clarity has a huge ability to drive digital asset and blockchain adoption. It is surprising how many markets still have uncertainties”. This of course being vital to Ripple’s expansion plans into other markets.

Technical Review – XRP/USD

XRP/USD 4-hour chart

XRP/USD, as seen similarly to some of its peers, is moving within an ascending channel pattern formation. This has been the case since the last part of the had fall within November. The stabilization of the price and formation of this channel, came into play on 25th November. Despite the price finding firmer ground after the hard selling, there is still a big lack of buying commitment.

Bearish Confluences

It is interesting to note that the recent price action, while moving within this channel, has also formed a head and shoulders pattern. The left shoulder, head and right shoulder are seen. In terms of the neckline, this cane be observed around the $0.3700. A convincing break below could very much ignite large selling pressure from the bears.

Another technical confluence in favor of the bears is this channel can also be viewed as a large bearish flag. The pole of this flag starting up at the heights of $0.5275 was last seen on 18th November, running down to a low of $0.3280. If playing out to the textbook and the price breaks lower, then a chunky move of around 35% to the downside could be seen (this being based on the pole length).

  • A technical move, as described above, will see the recent bottom area come under immediate threat. This is seen within a zone of demand, tracking from $0.3500-$0.3200. Looking further to the south, the next major buying area is seen down at $0.2500-$0.200 area.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Author:
Ken has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.