Ripple Price Analysis: XRP Sentiment In The 4-Hour Chart Turns Negative
Daily Ripple XRP Price Forecast
- Ripple price volatility is decreasing in the daily chart.
- XRP stuck under 20-bar SMA in the daily and 4-hour charts.
Since May 25, the Ripple price has been trending between $1.04 and $0.80. After moving horizontally below the $1.04 resistance between June 1 and June 3 before encountering resistance at the 20-day SMA. Since then, XRP has dropped to $0.866.
Ripple Price Volatility Going Down
The Bollinger band has started constricting to show decreasing price volatility. Even though the MACD shows slight bullish market momentum, XRP is still stuck underneath the 20-day SMA. This Thursday, the sellers have cancelled out any gains that the bulls made on Wednesday.
Image: XRP/USD daily
In the 4-hour time frame, the Ripple price failed at the 50-bar SMA and dropped from $0.96 to the $0.80 support wall, flipping the 20-bar SMA from support to resistance. The relative strength index (RSI) shows that XRP could drop some more before getting oversold. The parabolic SAR has flipped from positive to negative.
Image: XRP/USD 4-hour
Ripple Sidechains to ‘Unlock DeFi Capabilities’
Ripple’s CTO David Schwartz has proposed the introduction of federation sidechains to let devs implement smart contracts and decentralized finance (DeFi) capabilities adjacent to the XRP Ledger. In a blog post, Schwartz noted that Ripple has not added smart contracts capabilities to the XRP Ledger because of the risk of compromising the ledger’s focus on payments, despite the surging demand.
The growth of DeFi on networks using smart contracts has been pressuring the company to take action and add the capabilities to the XRP Ledger. Implementing federated sidechains for the ledger would allow developers to add native smart contracts that interact with the XRP token and the XRP Ledger while keeping the ledger itself “lean and efficient.”
Each sidechain would be its own blockchain with support to transfer XRP and issued tokens between it and the main ledger. To implement sidechains, Ripple claimed it only needs to make two changes to the XRP Ledger. Schwartz notes that each sidechain would have an account on the XRP Ledger, which can hold assets on behalf of its sidechain’s users. He added:
The account would use a multisign or threshold key, with the signers being the validators of the sidechain. Each sidechain validator operator registers a signing key that signs transactions on XRPL; thus, the validators of the sidechain can collectively create transactions to manage the sidechain’s Mainnet account.
Each sidechain will be able to use XRP as its native asset or have its native token. Per Schwartz, the advantages of federated sidechains include unlocking “new use cases like native DeFi capabilities and smart contracts.“
Ripple Price Is Expected To Reach These Levels
The Ripple price will likely drop to the $0.80 support wall. If this support barrier breaks, XRP will fall to the 200-day SMA ($0.71).