Does Ripple (XRP) Still Have Room For A Breakout To The Upside?

Ripple (XRP) has been in the eye of the hurricane for the past few weeks. There have been countless debates on whether Ripple (XRP) is a scam or not and whether it is going to be declared a security in the next few weeks or months. This has led to an unprecedented level of sell pressure on Ripple (XRP) which has led to a serious decline in the bullish momentum that we used to see in XRP/USD during green days in the market. Ripple (XRP) now behaves just like the next altcoin without any exuberance despite the dirt cheap prices. Now, all of that could indicate that the sentiment at the moment is pretty negative and a lot of investors are scared because they expect further declines. However, there is more to it than that.

Investors have been scared of declines before but that has not stopped them from accumulating Ripple (XRP) at such low prices. In fact, Ripple (XRP) investors are known for their loyalty and strong community support. They either hold or buy more when the market is down. So, what happened during the past few weeks that have changed investors’ approach towards Ripple (XRP) and what will be the future of XRP? Well, first of all the entry of JPM Coin has had a huge impact despite the community trying to downplay its effect. Now, this may not be because JPM Coin is supposed to be a better alternative to XRP but because XRP does not look so cool anymore when other people can do the same thing.

Chart for XRP/BTC (4H)

It all comes down to scarcity in this market. When an asset loses its scarcity and other competitors enter the space doing the exact same thing, it is bound to lose its market share and its market cap in some cases. So, we have seen Ethereum (ETH) dominating the platform arena but now with the entry of competitors like EOS (EOS), Tron (TRX), Zilliqa (ZIL), Lisk (LSK), Stratis (STRAT), Quantum (QTUM) and Ethereum Classic (ETC), Ethereum (ETH) is going to cede its market share to its competitors. The same is true of Ripple (XRP). Initially, it was Ripple (XRP) vs. Stellar (XLM). It was clear to investors that Ripple (XRP) is supposed to help the banks whereas Stellar (XLM) is supposed to help the end user. So, some investors picked up both as hedges against one another.

However, now that JPM Coin has entered the scene, a lot of investors are going to think that if banks can issue their own tokens, what do they need XRP for? Moreover, if a bank like JP Morgan starts offering the same services as XRP with the help of a partner like R3, what will be the fate of Ripple (XRP)? Now, I’m sure we could ask the same questions about the majority of other cryptocurrencies but in fairness to them, it is a bit early in their case to be asking to those questions. For instance, we could ask, “what do we need Bitcoin Cash (BCH) and Litecoin (LTC) for if Bitcoin (BTC) gets lightning network?” Now, those questions will be answered in time and the aforementioned cryptocurrencies might face the same fate as XRP but for now Ripple (XRP)’s future is in disarray. The XRP/BTC chart shows that there is some hope of a rally to the upside but it would not be reasonable to count on it having any long lasting effect.