XRP Moves Into the Weekly Spotlight, Dwarfing Other Crypto Assets

While bitcoin and ether generally comprise the lion’s share of conversation in crypto markets, a ruling in the U.S. District Court for the Southern District of New York, pushed another digital asset onto center stage this week.

Ripple Labs’ XRP token rose sharply this week as that the sale of XRP tokens on exchanges and through algorithms do not constitute investment contracts. The impact of the ruling was substantial, with XRP jumping 73% following the announcement.

For historical context, the upturn is the second largest daily increase in the asset’s history, second only to an 83% move on Dec. 14, 2017.

The XRP move dwarfs the bitcoin and ether’s respective -0.33% and 2.7% performance this week, nudging its two larger contemporaries to the background for the time being. The surge raised XRP’s market capitalization to $41 billion, moving it past BNB into fourth place among largest crypto assets. The asset still remains far-removed from its all-time high of $3.38, but the ruling effectively amounts to a re-pricing of the asset.

Not surprisingly, the relative strength index (RSI) for XRP moved to levels traditionally considered as overbought, as it shot to 88 before retreating slightly to 80. An asset is generally considered to be overbought if its RSI is above 70.

XRP’s 88 reading is the 10th highest in the asset’s history. On the 11 occasions when XRP’s daily reading has hovered between 79 and 81, it has gained 29.5% in the ensuing 30 days.

The question investors must answer is whether they expect XRP’s RSI to decline further, or if the ruling marks a new beginning for XRP, leading to a sustained move higher.

XRP prices retraced by a moderate amount in Friday trading, declining 15% in line with a decrease in crypto prices across the board. BTC and ETH fell by 4.2% and 4.6%, respectively.

XRP strength reflected in CoinDesk Indices

CMI rose as much as 6.8% this week with 172 out of 186 CMI assets finishing the week in positive territory. While XRP was the clear leader, Stellar Lumens (XLM) was the number two performer in the CMI, up 48.6%. XLM’s performance often mirrors XRP’s as both assets are highly correlated, historically.

Among the five CMI sectors, DeFi led the way, rising 11.4%. The leading three DeFi names were LQTY (41.9%), COMP (28.8%), and SNX (28.7%).

Ironically, the currency sector of which XRP and XLM belong, was the laggard, with bitcoin (2.9%) and bitcoin cash (-3.8%) dragging on the sector’s performance.

Bitcoin, Ether in “Significant Uptrend”

Despite taking a backseat to XRP and XLM this week, bitcoin and ether holders still have reason to be pleased.

The Coindesk Indices trend indicators for both assets remain in a “significant uptrend” territory, with BTC’s phase now entering its 23rd consecutive day. Ether has been seesawing between “uptrend” and “significant uptrend.” The late Friday weakness in both assets may lead to a downgrade in their current signal however.

Edited by James Rubin.