XRP price has slowly moved above a crucial resistance level this week, raising optimism that it will maintain its momentum. Ripple surged to a high of $2.2 on Wednesday, its highest level in over two weeks and 40% from its lowest level this month.
This article explores how high the XRP price will go if the Ripple Network is adopted by most US banks now that the SEC vs Ripple case is over.
The end of SEC vs Ripple case is a catalyst for XRP
One of the top catalyst for the XRP price is the growth of its partnerships in the United States now that its legal issues are behind it.
In a recent statement, Brad Garlinghouse, its CEO noted that partnerships with American companies almost dried up when the SEC filed its case in 2020. Instead, the company entered into agreements with international companies, particularly those in Asia.
The SEC decided to drop its case against Ripple this year, opening the opportunity for US firms to sign up.
Ripple is pitching it services as being better alternatives to SWIFT, a society used by thousands of banks globally. It argues that SWIFT uses ancient technology and which is costly and inefficient as transfers take time to complete.
Ripple’s RippleNet is a faster and lower-cost option, with the average transaction cost under $5. Its transactions take less than a minute to complete.
How Ripple payment network works
RippleNet handles transactions in two ways. It can use the XRP token, where a company sends XRP, which is then converted immediately to the local currency in the other bank.
The other option does not use XRP. In it, the two banks use the RippleNet messaging, and the payments are completed within minutes. The benefit of this approach is that the traditional correspondent banking approach is replaced with a digital ledger.
RippleNet uses three key aspects, including XRP Ledger, Interledger Protocol, and On-Demand Liquidity. XRP Ledger is a blockchain that settles XRP transactions, while ILP connects different payment networks. ODL is an option that Ripple uses to eliminate pre-funded accounts.
More US bank partners
The next key catalyst for the XRP price is that Ripple may start making deals with other American banks. Some of the top firms currently using its technology are Bank of America, PNC Bank, American Express, and JPMorgan.
The token would likely do well if more banks entered its ecosystem since that would be a signal of more adoption. It would also create a network effect as more companies join the RippleNet network.
XRP price has other potential catalysts. Ripple recently acquired Hidden Road, a company that handles transactions worth over $10 billion daily. The company has hinted that some or all of these transactions will be moved to the XRP Ledger soon.
Ripple is also hoping to be a big player in the payment industry. It recently moved Ripple USD (RLUSD) into its payment network and has received several money transmitter licenses in the US.
XRP price analysis
XRP price chart | Source: TradingView
The weekly chart indicates that the XRP price has rebounded this week, moving above the upper boundary of the triangle pattern. This triangle is part of the bullish pennant chart pattern, a popular bullish continuation pattern.
The length of the flag is about 450%. Therefore, measuring the same distance from the upper side of the flag brings the potential XRP price target to $18. Such a move would push its market cap to $750 billion.
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