Ripple Price Analysis: XRP Bears Halted By 20-day SMA

Daily Ripple XRP Price Forecast

Last Updated July 23rd 2021
3 Min Read
  • Bears have been in control for market For Six Days Out Of The Last Seven
  • MACD shows increasing bearish market momentum.
  • Between May 6 and May 14, the Ripple price dropped from $1.62 to $1.35 – crashing by $0.27. Overall, there have been seven bearish candles out of the last nine. During this downward surge, XRP managed to flip the 20-day SMA from support to resistance.

    50-day SMA Provides Support For Ripple Price

    Looking at the daily RIpple price chart, it is obvious to see how important the 50-day SMA has been critical in protecting the downside. The MACD shows increasing bearish market momentum. On the other hand, the Bollinger Band has started narrowing to show decreasing volatility so drastic price slumps could be avoided.

    Image: XRP/USD daily

    Ripple XRP Daily Chart

    In the 4-hour Ripple price chart, XRP faced major rejection at the 50-day SMA and plunged from $1.53 to $1.25. During this downtrend, XRP managed to flip the 20-bar and 200-bar SMA from resistance to support. Plus, they also managed to flip parabolic SAR from bullish to bearish.

    Image: XRP/USD 4-hour

    Ripple XRP 4-Hour Chart

    Ripple’s Partner Accenture And SWIFT Write Paper On CBDCs

    Accenture, one of Ripple's partners, has recently published a paper with SWIFT on the potential for central bank digital currencies (CBDC). The paper, titled “Exploring central bank digital currencies: How they could work for international payments”, claimed that there is surging interest for CBDCs.

    As per the document, at least half of the world’s central banks are planning to develop a CBDC. Three main factors contributed to this trend. First, reduction of physical notes. Second, to counter the effect of private cryptocurrencies as a threat to fiat currencies. Third, to improve security across wholesale markets. The paper stated: 

    Whatever the motivation, the momentum toward CBDCs seems clear and growing. Some central banks are already conducting live experiments, and the potential for currency evolution is being framed by some as a possible revolution in how value is exchanged.

    Two other reasons for the rise in interest around CBDCs are the potential drive for financial inclusion for less developed markets and to enable payment innovations, the paper added. The current trends led Accenture and SWIFT to make some assumptions. First, there is a high possibility that CBDCs will be issued by “many central banks” both domestically and abroad. Thus, these assets could bolster a new economy based on digital transactions.

    The company also believes that CBDCs would help in the reduction of fiat currency supply. A banking institution could have more control over the liquidity in their financial system. In addition, the distribution of CBDCs could be under more control of authorized institutions. They could leverage digital wallets to provide users with “accounts”. 

    The paper claimed that commercial banks could play a key role as providers of CBDCs for their customers. Conversely, these assets will need to have two key characteristics: infrastructure and interoperability for cross-border payments and other use cases. The paper claims the following, with potential room to apply one of Ripple’s XRP-based solutions:

    The concept of CBDCs moving across borders is complex. It is technically achievable with various technologies, but the meaning and usage of a CBDC outside its native jurisdiction is unclear. To be practical, some form of interchange mechanism with local currency must exist. (…) What will be required is a multilateral interchange mechanism that enables payments to be made end to end in a frictionless form.

    The report focused on how SWIFT will play a role in driving CBDCs. Ripple has had an active role in this area. Ripple CEO Brad Garlinghouse disclosed at the end of January 2021 that there have been meetings with banking institutions to issue CBDCs.

    Ripple Price Is Expected To Reach These Levels

    The buyers will have to conquer the 20-day SMA and flip it from resistance to support to reach $1.50.

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