XRP (CRYPTO:XRP) fell 2.4% last week. Its momentum was similar to the rest of the crypto market in the same period, which saw Bitcoin (CRYPTO:BTC) fall 2.21%. Prior to last week, XRP had been outperforming. It was beating Bitcoin for the first quarter. In fact, it is still doing better than Bitcoin for the full year. Down only 1.5% in 2022, XRP is faring much better than the average cryptocurrency. This past week’s price action may be attributed to little more than moves in the wider crypto market. Still, it’s worth exploring why XRP didn’t break out of the general trend, as it did earlier in the year.
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Bitcoin steals the show
One reason XRP may not have moved much last week is because Bitcoin was getting more attention. BTC’s trend in 2022 has been absolutely awful. It fell 26.5% top to bottom, and is still down nearly 3% for the year. Naturally, when BTC started regaining momentum in March, that got people talking. Bitcoin started making headlines when its price surged above US$40,000. That may have caused crypto traders to buy more Bitcoin instead of buying XRP.
No lawsuit news
Another factor that may have led to ho-hum performance from XRP last week was a lack of lawsuit news.
Ripple Labs is currently being sued by the SEC, and is widely perceived to be winning. Legal commentators, including a former SEC lawyer, have opined on the SEC’s case, saying that it has no merit. Ripple being caught up in a lawsuit many consider unfair has led crypto traders to rally around the XRP token. A whole community of XRP fans has sprung up on social media, Tweeting out on lawsuit-related hashtags and mocking the SEC.
Ripple’s procedural wins in pre-trial hearings may have given XRP some momentum. Ripple Labs is working on a number of projects that could increase XRP’s prominence. For example, it is building out the RippleNet payment platform, which is already being used by several international banks. If these projects succeed then the demand for XRP tokens will likely increase. If XRP wins its lawsuit, then it will be able to continue with these lucrative projects.
This all sounds very promising. The problem is that there has been a bit of a lull in lawsuit news lately. The last thing we heard about was Ripple moving to strike the Albert Metz report from trial. Since then, not much has happened. It still looks like Ripple is going to win, as former SEC officials have predicted. Nevertheless, the lull in activity may have dimmed investor enthusiasm.
Foolish takeaway
XRP is one of the world’s most fascinating cryptocurrencies. With a payment network that is increasingly being used by banks, it’s one of those tokens that really lends credibility to crypto as a whole. Last week, investor sentiment dimmed on the token. But that doesn’t mean it won’t start rising again. One lawyer has predicted we may see a settlement this month–you can bet that XRP’s price would respond to that news if it materialized.
