The XRP price continues to rise this week, aided by numerous bullish Ripple news items, including the growth of RLUSD stablecoin. It rallied by 7% in the last seven days, and has jumped by over 37% from its lowest level in April.
Ripple Labs and community members hope that RLUSD will gain market share from other stablecoins like Tether (USDT) and USD Coin (USDC). This article explores how high the value of XRP would get if RLUSD captured 80% of Tether’s market cap.
XRP Price Would Rise if RLUSD Got 80% of Tether’s Market Cap
A potential bullish catalyst for the XRP price is the growth of Ripple USD into a bigger force in the stablecoin industry. Its stablecoin now has a market cap of $294 million, making it the 20th biggest player in the sector.
It is also a much smaller coin compared to Tether, which has over $146 billion in tokens in circulation. As such, unless something major happens, it is highly unlikely that RLUSD will dethrone USDT.
However, there is a likelihood that stablecoin will continue gaining market share over time. This will accelerate now that Ripple’s legal issues have been resolved, a move that will help it secure more deals with US banks and other financial services.
For RLUSD to gain a 80% market share of Tether, its market cap needs to rise from $293 million today to $116.8 billion. Such a move would make it the second-largest stablecoin, surpassing USD Coin, which is valued at $62 billion.
The XRP price would likely perform well if such a move were to happen, as it would make Ripple a highly profitable company. Tether generated over $13 billion in profits last year, meaning that RLUSD would have generated approximately $10 billion. Some of these funds would be used to burn the XRP token.
Ripple Price Technical Analysis
The most likely XRP forecast is where the coin surges if its stablecoin market cap soars. However, it is somewhat challenging to pinpoint the exact price target. That’s because the Ripple USD’s growth to $116 billion market cap will likely take some time.
The weekly chart presents a bullish outlook for the XRP price. It has surpassed the crucial resistance level at $1.9857, its highest point in 2021. This price was the upper side of the cup-and-handle-like pattern that formed between 2021 and late last year.
XRP price has also received important support at the 50-week moving average. Therefore, the initial target will be the year-to-date high of $3.4, which is about 55% higher than the current level.
The Fibonacci extension can help you identify the next key level. By joining last year’s low of $0.288 and the all-time high, the extension brings the Ripple price target to $4.7187, up by 115% from the current level. Such a move would push its market cap to over $400 billion. It is also possible that the coin would surge to $17, where its market cap would get to $1 trillion if the RLUSD stablecoin had such a growth.
The value of XRP will become invalid if the price drops below the psychological level at $1.5. Such a drop will increase the likelihood of it falling below $1.
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