Place/Date: - December 22nd, 2020 at 10:47 am UTC · 4 min read
Contact: Bexplus, Source: Bexplus
On December 20th, as the BTC price reached a $24K all-time high, the BTC price increase in December exceeded 20%, but XRP fell by 15%. What does the operation of these transfers mean? How much you know about XRP and how can investors follow the whale to make quick profits?
“XRP is a digital asset built for payments. It is the native digital asset on the XRP Ledger—an open-source, permissionless, and decentralized blockchain technology that can settle transactions in 3-5 seconds. XRP can be sent directly without needing a central intermediary, making it a convenient instrument in bridging two different currencies quickly and efficiently”, this is the official explanation from Ripple’s website, a digital payments platform.
Unlike other cryptocurrencies, XRP is born to help people become independent of the traditional financial system. Ripple is used by institutional clients or banks for digital payments. It has become a popular method for cross-border remittances, which is more convenient and fast than other methods. XRP has lower fees and settles transactions in a matter of merely a few seconds. Ripple wasn’t created to replace fiat currency. However, one can speculate on the price movements of XRP to earn profits.
Ripple functions in a different way to other cryptocurrencies, thus there are many unique factors affecting the price of XRP.
Unlike bitcoin, XRP coins are not produced by mining. Instead, it is minted by the company Ripple. Out of the total 100,000,000,000 supply of XRP, over 45 billion is currently in circulation. So the company takes control of its price in some way.
Ripple’s main clients are banks and other major institutions, like Bank of America, Royal Bank of Canada, and UBS. There are more and more companies adopting this technology, which naturally improves XRP’s price.
Investors who tend to look for the next potential cryptocurrency find XRP’s large market cap and low cost per coin as a buying opportunity. So when the digital currency market is rallying, ripple may follow. Just like what happened on December 16th. However, if the market turns bearish, XRP could drop fast as well.
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To set a take-profit and stop-loss price is to prevent market violation. The preset price is based on how much loss you can bear and how much profit you want.
For example, you open a long position when the XRP price is increasing and you believe it will keep moving as you expected. But the market sometimes fluctuates strongly, one may encounter the forced liquidation if the price decreases sharply. Then it is suggested to set a take profit price and stop-loss price to protect your profit and lower your loss.