Demand for XRP as a payment tool may rise, does it affect the price?

Some investors and traders stated that amid the rate hike cycles and rapid drop in the value of USD, XRP would be used more often by investors as a decentralized payment tool since it was initially created for global payments. This implies that the company behind it plans on making XRP a rival for fiat money. Yesterday, XRP added upwards of 6% each in the past 24 hours amid a weakening crypto market. At the time of writing, Ripple’s native token is changing hands at $0.77.

demand-for-xrp-as-a-payment-tool-may-rise-does-it-affect-the-price

XRP/USD 4-hour chart | Source: TradingView

XRP price rise came amid positive sentiment for the payments tokens

XRP’s rise came amid positive sentiment for the payments tokens. Ripple founder Brad Garlinghouse said Thursday its ongoing defense against a lawsuit brought by the U.S. Securities and Exchange Commission was going “much better than expected.”

Ripple, which uses XRP in its payments protocol, disputes the SEC’s contention that the XRP token was issued and sold unregistered security to U.S. investors. Positive proceedings have historically caused a surge in XRP prices as investors see the ending of a legal case as an overall bullish sign. In February, for instance, XRP climbed 22% as important documents related to the point were ruled to be unsealed.

At that time, XRP investors don’t know what to do with their investment, and understandably so. With the SEC lawsuit hanging over their heads, XRP has seen much better days in the past. Its nearly 50% correction from its November 2021 high has been devastating for many.

Meanwhile, Ripple CEO Brad Garlinghouse has expressed optimism that the never-ending lawsuit against the US SEC will positively favor the company.

While speaking at the fireside chat at the Paris Blockchain Week on Thursday, Garlinghouse claimed that Ripple’s defense in the ongoing case was faring better.

“The lawsuit had gone exceedingly well and much better than I could have hoped when it began about 15 months ago.”

There are also some contrasting signals. Social dominance over the coin has spiked in the past two weeks. Historically, an increase in social dominance followed by a rally in prices has often been an immediate positive.

demand-for-xrp-as-a-payment-tool-may-rise-does-it-affect-the-price

Social Dominance | Source: Santiment

Short-term prices may prevail. With that, funding rates are also positive, meaning that holders of long positions on XRP perpetual futures are paying to hold those – suggesting some upside. Plus, according to data from Coinglass, over $3.1 million worth of shorts were liquidated during the recent ~9% rally.

With these bears, XRP is likely to see another short-term rally. However, with weak on-chain fundamentals, it seems likely that XRP will not be able to provide a good ROI unless major positive news occurs. Although, there are still good trading opportunities in the short term. So a short-term long position with strict stoploss and target may be the way to go.

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