On Friday, just as we got some good Ripple news, the relentless pendulum of market forces swung back the other way, causing XRP to drop 3.85%.
There’s no mystery as to why it happened. Ripple prices kept rising as trading volumes rebounded, then they fell as trading volumes dipped. It’s not rocket science.
That said, there is a silver lining of which investors should take note.
Namely, that XRP outperformed Bitcoin today. The Ripple to USD exchange rate may have returned to $0.208045, but the Ripple to Bitcoin rate is 2.01% above where it was yesterday.
At least this shows we were right about a reverse-rotation of funds from Bitcoin to altcoins. You can see evidence of this trend in the distribution of market shares—Bitcoin’s dominance dropped to 57% from its earlier level of 63%.
Overall, this trend suggests that the market might be returning to common sense. The last two weeks were a rollercoaster of insanity, with Bitcoin breaking past all manners of barriers as everyone and their grandmother jumped on the bandwagon.
These investors were blinded by two things:
- The SegWit2x proposal to upgrade Bitcoin.
- The CME Group Inc‘s (NASDAQ:CME) decision to add Bitcoin futures.
Recent developments have brought them crashing back to Earth.
For one thing, the developers behind SegWit2x called it off, citing fears that it would cause too much internal strife within Bitcoin. And second, investors realized that the CME decision is pending approval by the Commodities Futures Trading Commission.
In any case, the big picture still looks good for Ripple. Yesterday’s drop in trading volume was minor, from $156.96 million to $147.92 million. That’s a measly 5.8% drop. Compare that to the surge the day before, when trading volumes skyrocketed 37.6%.
There will likely be some more volatility as “bandwagon money” drains out of the crypto space. However, the long-term forces behind XRP are unchanged, and as such, we do not amend our $2.00 Ripple price prediction for 2018.