On Wednesday, there was a broad-but-shallow dip in the overall cryptocurrency market. XRP prices were caught in the downdraft, but it is unlikely to affect our $2.00 Ripple price prediction.
That said, trading volumes remained below $100.0 million for the fifth consecutive day, sparking some concern that liquidity could become a problem. In the last 24 hours, only $34.5 million worth of XRP coins changed hands.
Contrast that to the end of August, when trading volumes registered at $432.6 million.
Given the present environment of fear, it’s no wonder that the Ripple to USD exchange rate dropped 1.26% to $0.182020.
However, Ripple did gain 1.15% against Bitcoin, a hopeful indicator that some investors remain more bullish on enterprise blockchains than public ones. Another explanation is that the shock of China’s crypto crackdown is wearing off.
BTC dominance—a measure of Bitcoin’s market cap as a percentage share of the overall crypto market cap—dropped from 48.2% to 48.0%. This may not seem like a big deal, but whenever it moves away from 50%, altcoins tend to do well.
That’s partly because Bitcoin has become a de facto reserve currency for the rest of the crypto market. In times of crisis, investors rush towards it like it’s gold. But we’re seeing an unwinding of that caution, as is clear from Ripple’s one-week performance.
It is essentially flat across the last seven days.
As you can tell, the one thing not moving XRP prices is Ripple news. The market is far more concerned with its trauma from the China crackdown, and any pending regulations in major markets.
In the short run, we see the XRP price getting a lift from positive regulatory action. For instance, the Chairman of the Commodities Futures Trading Association recently said that developing blockchain technology was in America’s “national interest.”
Considering that his agency will likely lead the regulation of cryptocurrencies, this news should have sent prices flying. But the market is still a little punch-drunk.
Once that crypto-friendly language is solidified into crypto-friendly regulation, my guess is that Ripple prices will accelerate to $0.50.
From that point, each new financial firm on its network will lend support for the currency reaching its longer-term forecast of $2.00.