Ripple (XRP): Can Recent Development Trigger Diminished Investor Sentiment?

XRP Ledger (XRPL), a decentralized public network, confirmed testing its initial EVM-compatible sidechain on October 17. That comes as the blockchain ventures into the layer2 scaling solutions space.

Moreover, the announcement came one year after Ripple’s Chief Technology Officer David Schwartz declared the underway EVM sidechain establishment. He stated that the sidechain would alleviate entry barriers for developers that want to install dApps (decentralized applications) with cross-chain interoperability.

The network’s development staff RippleX stated that the sidechain would allow developer access to XRPL’s functionalities like sustainability, low-cost transactions, and speed. Also, it will attract Solidity smart contracts to XRPL.

Besides the side chain, RippleX declared a launch that bridged XRP Ledger Devnet and EVM-compatible chain. The bridge allows developers to enjoy EVM and XRPL-compatible blockchains. Meanwhile, the bridge and the sidechain represent the project’s first phase.

The 2nd phase will likely commence early next year. The development team stated that it would include a bridge that links to XRPL Devnet and a permissionless EVM sidechain. That would test scalability and participation in a controlled atmosphere.

Meanwhile, the final phase would include the permissionless EVM sidechain mainnet and bridge launch. The team didn’t disclose the timeline.

XRP Tales

While publishing this post, XRP traded near $0.4763 (Coinmarketcap data). Meanwhile, the alt’s price embarked on uptrends between October 3 and 7, printing a climbing wedge setup on the daily chart. Nevertheless, XRP overpowered this wedge during October 8 declines. That saw the price sliding by around 10%.

Considering sustained buying pressure dips within the past ten days, Ripple’s RSI (Relative Strength Index) has exhibited lows. Furthermore, nearing the neutral territory, the RSI maintained downtrends during this publication, reading 58. Also, the MFI (Money Flow Index) stood at 52 during this writing, indicating faded buying momentum.

Should these primary indicators dip beneath their neutral levels, that would suggest a substantial liquidity dip within the XRP marketplace. Moreover, sellers would dash to hedge against more declines. However, time will tell what upcoming sessions will incorporate.

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