XRP, the native crypto of Ripple, has gained 91% in the last month and data indicates that there are three fundamental factors that have spurred the crypto to a multi-year high.
The crypto is now trying to match the gains of Bitcoin (BTC) and Ether (ETH). What fueled the rally are sharp rise in XRP addresses, repurchases from Ripple and the likelihood of new product offerings.
On-chain data can be used for portraying the widespread view about a crypto as it precisely mirrors the transactions happening on a blockchain. In case of XRP, addresses holding the crypto started rising sharply last week.
The trend intensified when the crypto gained 27% in a day. Academics at Santiment, an on-chain analysis company, stated that the one-day rise in active addresses was the biggest since May 1. They opined:
“Ripple’s price skyrocketed +27% today, and the amount of unique addresses transacting on the $XRP network in a single day (24,408) was the highest output since May 1st.”
Active addresses can simultaneously rise with the appreciation in price for many reasons. To begin with an increase in the number of addresses accumulating XRP could provide the necessary thrust for the price appreciation.
Secondly, there could be a sharp rise in the user activity in the XRP blockchain. During the third-quarter of 2020, Ripple purchased $45.50 million worth XRP in repurchasing plan. The company clarified that the steps taken would ensure the creation of healthy markets.
Ripple’s third-quarter report includes sales summary that provides details on aggregate purchases worth $45.50 million. In earlier quarters, Ripple did not repurchase any XRP. The report states:
“As indicated in the Q2 2020 XRP Markets Report, Ripple is purchasing – and may continue to purchase – XRP to support healthy markets.”
A repurchase can spark buying pressure, resulting in an increase in the price, irrespective of whether it is a stock, cryptocurrency or commodity. Though $45.50 million worth repurchase cannot have a considerable effect on the value of XRP in the crypto market, but could have certainly improved the overall sentiment towards the asset.
Earlier this month, Ripple Labs submitted a trademark application for a product named Paystring with the US Patent and Trademark Office (USPTO).
The trademark application explains Paystring as a system under the electronic financial services category for remittance and receipt of payments. The document further states:
“PAYSTRING trademark registration is intended to cover the categories of electronic financial services, namely, monetary services for receiving and disbursing remittances and monetary gifts in fiat currencies and virtual currencies over a computer network and for exchanging fiat currencies and virtual currencies over a computer network.”
Therefore, the optimism about new product launches, XRP repurchases and increasing addresses are reflecting in on-chain data and is believed to be the reason behind XRP’s latest rally to a 16-month high.
Subsequently, XRP was able to breach two multi-year levels on the larger time-frame charts. Most importantly, the weekly chart displays a sharp rally towards a price level unseen since November 2018.
