XRP price has crashed into a technical bear market after falling by over 32% from its highest point this year. Ripple was trading at $2.28 on Monday, up from this month’s low of $2.08. This article explains why the XRP token is at risk as a major threat emerges.
RippleNet Faces Circle Threat
The XRP price has numerous catalysts that may propel it significantly higher in the long term. The most common ones are the XRP ETF approval, whale accumulation, and the potential for RippleNet to disrupt the Swift payment network.
The last option now faces a major challenge that may disrupt its growth trajectory: the Circle Payment Network.
RippleNet is a technology developed by Ripple Labs that uses the XRP Ledger to facilitate cross-border payments within seconds. It utilizes the Ripple Protocol Consensus, which can process transactions within 5 seconds.
RippleNet runs three key products: xCurrent, On-Demand Liquidity (ODL), and xVia. These products aim to facilitate faster payments, either by using the XRP token or other means. xCurrent integrates with existing banking software to integrate the Interledger Protocol for communication between ledgers and does not need XRP.
READ MORE: XRP Price Prediction: Can Ripple Turn $1K to $10K by 2030?
The argument is that the XRP price will surge as the technology becomes more popular. This, in turn, will lead to higher fees, resulting in more XRP being burned.
The risk, however, is coming from Circle Payment Network (CPN), which aims to achieve the same goal using the USDC token. CPN has already reached agreements with companies such as Yellow Card, Transfero, Nuvei, FOMO Pay, and Flutterwave.
It connects financial institutions to orchestrate global payments using stablecoins like USDC and EURC. Once companies are onboarded, they can now use their architecture to send money, and the transaction is completed within seconds.
It does that by removing the numerous layers that exist today. For example, when someone sends money through a bank today, it must first be processed through a correspondent institution, a process that can take hours or days. CPN completes it within seconds.
There is a likelihood that Circle will surpass Ripple because it already has a large stablecoin and a cleaner reputation, now that it is a publicly traded company. Circle also counts BlackRock as a significant investor, which will likely encourage more institutions to adopt its technology.
XRP Price Descending Triangle Points to More Downside
The other big risk is that the XRP price has formed a descending triangle pattern on the daily chart. This pattern comprises a descending trendline connecting the highest swings since January, along with a horizontal support at $1.9255.
A descending triangle is one of the most bearish patterns in technical analysis. Therefore, there is a risk that it may crash to $1 if this pattern works out. This view will be valid if the token plunges below the support at $1.9255.
