Key Highlights:
- Following Ripple’s selection of BNY Mellon as custodian for its RLUSD stablecoin, the price of XRP experienced a surge of approximately 12%.
- Market participants are anticipating a broader use of XRP, potentially as the adoption of RLUSD shifts from the Ethereum network to the XRPL.
- Positive chart patterns suggest that XRP could potentially climb towards $2.87 or even $3.72, provided it maintains a price above $2.
The value of XRP (XRP) has increased by over 11.75% in the last week, going from $2.15 to $2.40, following Ripple’s announcement of a collaboration with BNY Mellon, one of America’s oldest banking institutions.
BNY Mellon Partnership Strengthens XRP’s Utility
On July 1, Ripple designated BNY Mellon as the primary custodian for its stablecoin, Ripple USD (RLUSD).
RLUSD is currently active on both the Ethereum and XRP Ledger (XRPL) blockchains. However, data from DefiLlama indicates that approximately 87% of its activity remains concentrated on the Ethereum network.
Some analysts, including Crypto Eri, believe that the true long-term potential of XRP lies in RLUSD’s native presence on the XRPL and the potential shift towards Ripple’s ecosystem.
“Ripple, as a company, is focused on a long-term strategy, requiring XRP investors to be patient and expect significant market impact via utility,” she posted on X on Tuesday, adding:
“Their public announcements regarding the integration of smart contracts on the mainnet will eventually position RLUSD on XRPL, as a MORE competitive stablecoin, offering faster and more cost-effective settlements compared to Ethereum.”
Increased demand for XRP could arise if XRPL can capture a portion of the stablecoin market share from Ethereum. Traders might be factoring in this potential, seeing the BNY Mellon agreement as a signal of rising institutional support.
XRP Targets 20% Gain Following Breakout
XRP has surpassed the neckline of an inverse head-and-shoulders pattern on the daily chart, which is a commonly observed bullish reversal pattern.
The breakout level, around $2.30, is now acting as potential support. The pattern’s structure suggests a potential upside target near $2.87, indicating an approximate 20% increase from the breakout point.
This breakout coincides with bullish confirmation on the three-day chart, where XRP seems to be exiting a multi-month descending triangle range, as noted by analyst Mikybull Crypto. He stated:
XRP FINALLY BREAKING OUT
Descending triangles appearing during an uptrend frequently result in a breakdown. However, in certain cases, they may act as bullish continuation patterns.
XRP’s consistent rise above the triangle’s upper trendline may indicate the latter scenario. If this holds true, the triangle breakout target would be around $3.72 in August, representing a potential increase of approximately 55% from current levels.
Related Reading: XRP needs to surpass this critical threshold to reach $3 again
This article is intended for informational purposes only and should not be considered financial advice. Investing and trading involve inherent risks, and individuals should conduct their own thorough research before making any decisions.