XRP/USD Price Analysis: December 2020, Prediction for 2021The stupendous fall of 58.6% from 0.5140 to 0.2126 in XRP/USD that occurred between 21st and 22nd December 2020 was in the headlines of all cryptocurrency media.
The reason behind the fall was the SEC’s lawsuit against the founders of Ripple – the company that issued the XRP token – for the sale of XRP worth $1.3 billion along the years since the creation of XRP in 2013.
XRP is a highly centralised and permissioned token: Ripple controls who owns the nodes on its blockchain and selects entities who get to own an XRP node. Therefore, aiming at Ripple founders SEC hit XRP hard.
75% of retail CFD investors lose money
Since then XRP fell to 0.1727 on 29th December, with investment organisations withdrawing it from their portfolios. The XRP/USD trading pair remains capped under the 0.2500 mark, and that is with BTC/USD rising above 34,000 and ETH/USD hitting 1,164. This is a clear implication of lack of good prospects for XRP/USD in the foreseeable future.
Everything will depend on how the case resolves, and that will surely not happen fast. The legal process will definitely be a long-lasting and highly contentious one, with the complainant’s evidence having to embrace years of Ripple’s XRP sales.
What to expect in 2021
Even though the current levels of XRP/USD look very lucrative from a technical point of view, buying bets on XRP/USD may not prove lucrative in 2021 after the massive outflow of value from the blockchain, including from big funds. The development of the legal process will be the main fundamental issue shaping the price behavior for XRP/USD in 2021. The key proceedings might create increased volatility in the pair, giving some short-term trading opportunities.
From a long-term point of view, the situation with XRP looks brumous and uncertain. The token’s chances of a return to its all-time high of $3.7 are no longer high. In a positive scenario, it could reach $0.6 by the end of 2021.
Konstantin Anissimov, Executive Director at CEX.IO