Is the Crypto Market Sentiment Changing? Or are we at the Cusp of a Major Fake Out?

Over the past week, the crypto market has experienced upward volatility similar to December and January. This was seen with XRP increasing +95% at one point last week, followed by a +20% increase in the price of Bitcoin Cash. With these levels of increased volatility, overall market sentiment is starting to become more bullish. Mike Novogratz calling a market bottom is also a bullish sign to many amateur retail investors. But overall, is this momentum real? Or is it merely an attempt for whales to suppress prices even lower? With such high levels of resistance at $7,000 and $7,500, what could possibly propel bitcoin into a bull market?

Over the past month, the outlook on crypto has been changing subtly. On Twitter and throughout mainstream media many are starting to lose faith in major coins such as bitcoin and Ethereum. Since the beginning of August, Ethereum has declined from $426 (Aug 1st) to $225 (Sept 28th). This decline was largely caused by a significant amount of ICO’s selling their Ethereum in order to cover baseline expenses. This negative view of Ethereum is compounded by the difficulties of scaling and the severely low Dapp usage on the platform.

The cryptocurrency world also experienced a frightening realization after discovering the bitcoin ‘inflation bug.’ Although the bug was properly disclosed and fixed, the cryptocurrency space realized that the Bitcoin Core developers are not perfect and bitcoin has vulnerabilities. Additionally, bitcoin maximalists realized Bitcoin Cash developers are not useless.

These uncertainties create doubt in the minds of investors, especially when bitcoin and Ethereum have yet to deliver on their scaling promises. Waiting 30 minutes for a bitcoin transaction is not practical for a daily use case as a means of exchange. It may be effective as a store of value, but in a bear market there is no value to store. In addition, the US stock market is recording all-time highs along with Morgan Stanley releasing an outlandish price prediction for the Amazon stock price to hit $2,500. So why would any institutional investor leave a massive bull market for cryptocurrencies which have yet to even come close to mass adoption?

If a 2019 crypto bull market is to occur it is not going to be caused by bitcoin. Currently, one of bitcoin’s most valuable use cases is serving as a gateway from fiat to alt coins. With the continual creation of reliable stable coins this value proposition will likely decrease along with bitcoin dominance. Additionally, scaling solutions for both bitcoin and Ethereum are expected to be implemented in 2020 at the earliest, while an XRP transaction currently takes 4-8 seconds and will continue to decrease. With the implementation of XRapid, banks could save up to 60% on international settlement fees.

Up until now, most cryptoassets have traded on speculation and future use cases. Currently, some coins have prominent use cases, but the one which is expected to have the fastest adoption is XRP. Ripple and their established partnerships will introduce real world adoption for large international bank settlements.

Last week’s pump in XRP was attributed to a vast increase in demand from Japan, which remains the largest crypto market in the world ahead of the US and South Korea. ‘The volume of XRP-to-yen and XRP-to-crypto trading pairs surged in the Japanese cryptocurrency exchange market, fueling the rally of XRP.’ Although many banks want to use XRP with xRapid,

“In Japan, local regulations require businesses that intend to work with banks and their APIs to process payments are required to be licensed as an electronic payments agent and register with local financial bureaus.”

Recently, Ripple became a licensed payments agent with SBI Ripple. Now there is nothing stopping banks from using Ripple’s products such as xRapid and xCurrent, with this development XRP bank adoption is expected to increase. According to an article from CCN,

“Over the past year, SBI Ripple Asia has brought in 61 Japanese banks to its consortium representing 80 percent of Japan’s total assets. In the upcoming months, the consortium could begin to utilize the Ripple network to process cross-border payments.”

SBI Ripple Asia allows banks to integrate various blockchain-based products such as xRapid and xCurrent into the existing infrastructure of major banks.

Once xRapid is implemented, Asian volume will be real and it may have the momentum to bring crypto out of a bear market with XRP drawing the most attention. This is one possible scenario that seems all too good to be true. Nevertheless, investors should anticipate a major announcement at Ripple’s annual ‘Swell’ conference on October 1st, with Bill Clinton as the primary speaker.

Overall, 2018 has not been the year most cryptocurrency enthusiasts have hoped for. It has been a year of building infrastructure in which the vast majority of investors have gotten rekt since January highs. For the mainstream public, bitcoin and cryptocurrency hype has completely died while being overshadowed by bubbling weed stocks and an overbought US stock market.

Disclaimer: I am not a financial advisor, this is not financial advice. Please do your own research and make objective decisions. This article is intended to educate readers on the possible future upgrades of XRP. Disclosure: the author of the article owns cryptocurrency.