Investors received some positive Ripple news on Monday, ending the previous 24 hours of trading at an 11.28% premium. It was a welcome break from last week’s red-ink parade, but don’t get too comfortable, because sunshine and rainbows aren’t the only things in the forecast.
There is much more volatility on the horizon, chiefly because South Korean authorities are following Japan down the cryptocurrency hole. They are fashioning rules to implement blockchain technology, causing coins to trade at a premium.
It’s not just XRP, in fact. Bitcoin Cash and Monero have also experienced a boom in South Korean trading, but how long can that last?
To be sure, legitimizing cryptocurrencies in South Korea should provide long-term support for our Ripple price prediction, but it is unlikely to create short-term clarity.
Political risk is inherently difficult to quantify, meaning that its very existence creates uncertainty in markets. And since uncertainty is the root of volatility, XRP prices will be shaky over the coming months.
Expect Ripple to continue its see-saw behavior through the remainder of 2017, during which sudden bursts to the upside are followed by a peeling back of those gains. The net result is still likely to be positive, though, as is evident by the current state of Ripple.
Not long ago, it was trading between $0.15 and $0.16. The explosion in South Korean trading sent it to nearly $0.30, before falling to $0.20. Now it’s back to between $0.22 and $0.23.
There’s no definitive way for analysts to decipher what lawmakers are thinking. This is both a good and a bad thing, because volatility is the only route to extraordinary gains. I know it looks awful when you’re on the short end of the stick, but it is essential. Remember that.
Also, try to keep in mind that some portion of the South Korean traders will want to cash in their gains upon each surge. So while it’s great to see another country embracing the future, don’t expect smooth sailing for quite some time.