Ripple’s XRP price remained in a tight range this week even as Bitcoin finally made its bullish breakout as demand for its ETF jumped. XRP remained unchanged at $0.5191, where it has been throughout the week. It remains in a bear market after crashing by over 20% from its highest point this year and by 44% from its 2023 high.
Bitcoin finally broke out
A major crypto news of this week was that Bitcoin price finally managed to have a strong bullish breakout. After weeks of consolidating at around $43,000, BTC staged a strong bullish breakout as investors cheered the ongoing Bitcoin ETF inflows.
Some of the biggest beneficiaries of this were funds from companies like Blackrock and Fidelity whose assets jumped to over $3 billion and $2.6 billion, respectively. This trend shows that there is still institutional demand for these assets as many of them allocate BTC as part of their balanced portfolios.
Therefore, many analysts believe that Bitcoin has more room to grow. They cite the upcoming Bitcoin halving event that is scheduled for April this year. Halving will reduce the number of Bitcoins that are generated every day, a move that will impact its supply.
There is also the ongoing optimism that the Federal Reserve will start cutting interest rates later this year since inflation is falling. For example, in China, the biggest manufacturer in the world, is going through deflation. As such, there are signs that China will also export deflation in the coming months as its economy slows.
There are other reasons why Bitcoin made a bullish breakout. For example, technically, the coin remained constantly above the 50-day moving average, which is a positive thing for its price action. Also, there are signs that investors want to retest the YTD high of $49,000.
Why Ripple price is struggling
A close observation is that Ripple’s XRP price has completely lost its correlation with Bitcoin and other cryptocurrencies. For one, while Bitcoin is sitting near its highest point since 2022, Ripple has remained over 44% below its highest point in 2023. It has never recovered after Ripple Labs won a major lawsuit against the Securities and Exchange Commission (SEC).
That lawsuit was an important one because it validated the view that XRP was not a security. This means that financial companies will not have a difficult time convincing the SEC about the coin when they apply for a spot XRP ETF.
XRP price is struggling because of the falling volume among traders. Data by CoinGecko shows that the average daily trading volume for XRP has been below $1 billion in the past few months. While these are still huge numbers, they are much lower historically. For example, in December, it was not uncommon for the volume to be over $2 billion.
Further, XRP price has dropped as investors raise issues about its ecosystem from a fundamental side. For one, Ripple has not announced any major new partner recently. There are also concerns about its role in the money transfer industry since stablecoins are seemingly becoming better alternatives to its platform.
XRP price prediction
Turning to the daily chart, we see that the XRP token price has been under intense pressure in the past few months. Recently, it has settled at about $0.5185, where it has been in February. This price is notable because it is along the ascending trendline that connects the lowest swings since May last year
Ripple has also formed a head and shoulders pattern and it remains below the 50-day Exponential Moving Average (EMA). Therefore, the outlook for the token is still bearish. This view will be confirmed if it moves below the support at $0.4700. If this happens, the next level to watch during the sell-off will be at $0.4500.
Alternatives to Ripple
Therefore, with Ripple having no immediate catalyst, investors are looking for alternative coins to buy. Bitcoin is one of the most popular coin to buy because other coins tend to follow it moves. The other alternatives to consider are Celestia (TIA), Solana (SOL), Avalanche (AVAX), and Sui.
