XRP breaks past key resistance as Ripple announces Ethereum-compatible smart contracts
- Ripple gears up for Ethereum-compatible smart contracts on the XRP Ledger, which should boost functionality.
- Ripple plans to use the Axelar network for cross-chain token transfers; wrapped XRP is the primary token on the sidechain.
- XRP crosses $0.57 early on Tuesday, holds steady above $0.56 at the time of writing.
Ripple (XRP), a cross-border payment remittance firm, made several key announcements in Japan and Korea on September 3. One of the key announcements was the plan for an Ethereum-compatible sidechain on the XRP Ledger.
XRP erases 0.75% of value on Tuesday, holding steady above key support at $0.56.
Daily digest market movers: Ripple to welcome Ethereum-compatible smart contracts on its chain
- Ripple shared plans to boost the functionality of the XRP Ledger by integrating Ethereum-compatible smart contracts through a sidechain.
- The addition would help Ripple expand the utility of its chain beyond basic transactions and include complex applications like decentralized exchanges and token issuance.
- Ripple plans to use Axelar network, a decentralized interoperability platform to facilitate cross-chain token transfers with wrapped XRP (eXRP). eXRP would act as the primary token on the sidechain to facilitate interoperability.
- Smart contracts on Ripple will allow developers to issue tokens, process trades and support functionality for decentralized exchanges and financial applications on the Ledger.
2/ Ripple and the broader XRP community are committed to bringing new programmability, including smart contracts, to the XRPL dev ecosystem in 2025 – through the XRPL EVM sidechain (already in the works) as well as exploring native capabilities on XRPL Mainnet.…
— Ripple (@Ripple) September 3, 2024
- The firm made other key announcements, a partnership in the AI and metaverse space, with Futureverse. The project will assume safe custody of metaverse-related assets for Ripple.
- Ripple’s University Blockchain Research Initiative added Korea’s Yonsei University as a new global partner. Ripple’s research program is aimed at supporting technical developments in blockchain technology.
Technical analysis: XRP could extend losses by 7%
XRP trades at $0.5610 at the time of writing. The native token of the XRP Ledger could extend losses further and sweep liquidity at $0.5187. The level marks the lower boundary of the Fair Value Gap (FVG) between $0.5187 and $0.5767.
The Moving Average Convergence Divergence (MACD) indicator flashes red histogram bars under the neutral line. The indicator shows there is underlying negative momentum in XRP price trend.
Relative Strength Index (RSI) reads 46.30 as the indicator climbs toward neutral level at 50.
XRP/USDT daily chart
A daily candlestick close above $0.5767 could invalidate the bearish thesis. Once XRP begins its recovery, the altcoin could attempt to rally to $0.6217, a key resistance level for Ripple.
Bitcoin, altcoins, stablecoins FAQs
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
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