Ripple (XRP 0.10%) is in for a massive jump in value. At least that's what the crypto token's history suggests. In July, XRP traded at roughly $2.20. In a matter of weeks, however, the price spiked to over $3.60.
Since those highs, XRP has gradually given up nearly all of those gains. The token currently trades at roughly $2.20 yet again. Could another breakout be just around the corner?
CRYPTO: XRP
Key Data Points
1 thing every Ripple investor should understand
To determine whether history will repeat itself, it's important to look at what caused Ripple's valuation to soar so much in the first place. The last major upward move for XRP occurred roughly from July 1 to July 20. But here's the thing: It's not totally obvious what caused this rapid spike. At the time, crypto markets in general were doing well. The U.S. government, meanwhile, began discussing more friendly regulations for the industry. And some technical analysts argued that the token had been in a period of consolidation, poised for a breakout.
In short, it didn't take much to get Ripple's price soaring -- just a collection of somewhat positive events stacked within the same week or two.
Image source: Getty Images.
To be sure, Ripple is not a meme coin. The project has legitimate foundations, with a technology that could be a game changer for international bank transfers over the long term. Ripple is also building out an ecosystem to support its network, including a new stablecoin that will make transfers more efficient. That said, XRP's movements can be very volatile, and even random. Predicting another breakout is as difficult as forecasting another correction. Put simply, no one knows exactly where XRP is headed next.
XRP is still a reasonable investment for long-term shareholders bullish on crypto adoption among financial institutions. But this story will take many years to fully play out. Expect heavy volatility along the way -- both up and down.
