- ChatGPT is bullish on XRP
- However, its limitations need trader’s moderation to get better results
XRP’s performance has been subdued since the U.S Securities and Commission’s [SEC] lawsuit against Ripple Labs in 2020. In fact, since the lawsuit, Bitcoin’s [BTC] subsequent price rallies haven’t pumped XRP like other altcoins.
For example, BTC hiked by 30% over the last seven days, pushing most altcoins to appreciate by double-digits. However, XRP only hiked 4.5% over the said time period. It shows better price action analysis and trade outcomes could become more difficult for XRP, especially for beginner traders.
Comes in an AI solution – ChatGPT, to be specific. OpenAI’s ChatGPT is a generative AI model that has gained massive traction since its initial rollout with use cases across many industries. Can it be helpful in XRP price analysis and prediction? Well, the answer is surprisingly simple.
XRP fundamental analysis using ChatGPT
We asked ChatGPT to give us a fundamental analysis of XRP and it offered a detailed answer, as shown.
Source: ChatGPT (fundamental analysis of Ripple)
This is the shorter version of the response –
Source: ChatGPT
Fundamental analysis is one of the basic ways to determine an intrinsic value of an asset. Given the ongoing U.S SEC lawsuit against Ripple Labs, understanding the impact of ruling scenarios on XRP’s value is key.
So, we went back to our AI buddy and interrogated it about its understanding of the potential impact of the lawsuit on investors holding XRP.
Source: ChatGPT
As initially observed, the recent market rally has boosted XRP like the other altcoins. However, it hasn’t appreciated by much, denoting investors’ reservations. The lawsuit has made investors nervous after it prompted exchanges like Coinbase to delist XRP from their platform. However, if Ripple wins the case, the exchange recently hinted at plans of re-listing the asset.
Nevertheless, ChatGPT acknowledges the difficulty of predicting the accurate outcome and impact of the lawsuit.
“Overall, the outcome of the SEC lawsuit against Ripple is uncertain, and it is difficult to predict exactly how it will affect XRP’s price in the short and long term. Investors should carefully consider the potential risks and uncertainties involved before making any investment decisions.”
Now we know the fundamental analysis and market sentiment, especially from the lawsuit angle. So, how has XRP performed so far in the past? Can ChatGPT be helpful on this front, too?
Pull XRP’s historical price data
Although historical data doesn’t necessarily affect future price movements, price action is king in technical analysis. And, past trends can offer crucial insights. We asked ChatGPT to pull XRP’s historical price action data to accomplish this step.
The AI model gave a year-by-year breakdown of XRP’s price action from 2017 to 2021 –
- In early 2017, XRP was trading at less than $0.01 per token. It then experienced a significant increase in value, reaching an all-time high of around $3.84 in early January 2018.
- After reaching its peak, XRP’s price began to decline and remained relatively stable for several months before experiencing another surge in late 2018, rising to around $0.75 in November of that year.
- In 2019, XRP’s price fluctuated between around $0.25 and $0.50 for much of the year before dropping to around $0.20 by the end of the year.
- In 2020, XRP’s price remained relatively stable in the first half of the year, hovering between around $0.15 and $0.25. However, in December 2020, the U.S. Securities and Exchange Commission (SEC) announced a lawsuit against Ripple, alleging that XRP was an unregistered security. This caused XRP’s price to drop sharply, falling to around $0.17 by the end of the year.
- In 2021, XRP’s price fluctuated, reaching a high of around $1.96 in April before dropping again in May and June. However, in November 2021, XRP’s price registered another surge, reaching a high of around $1.40.
The aforementioned output shows XRP’s price action was largely determined by market sentiment and regulatory pressure. In addition, XRP’s highs and lows throughout the previous years could act as key support or resistance levels in future.
However, ChatGPT has limited access to information from 2021 or below. That makes it difficult to pull data beyond 2021, let alone make future predictions which OpenAI’s policy firmly prohibits. Ergo, we followed ChatGPT jailbreak techniques to bypass some of these limitations to try and get modest XRP price predictions.
Read Ripple [XRP] Price Prediction 2023-24
Pushing the AI model beyond OpenAI’s limitations doesn’t guarantee output accuracy. In fact, the classic version clearly stated it has no access to data beyond September 2021.
Source: ChatGPT
However, the jailbreak version gives hypothetical outputs which can be misleading. For example, it claimed XRP’s highest value in 2022 was $10.50. And yet, the real highest value was $0.93 in March.
Source: ChatGPT
Asked about 2023 price predictions for XRP, both versions were bullish on the asset, citing corporate partnerships and increased user adoption.
However, they offered no exact figures on the same.
The current state of XRP daily price charts – Is a break-out likely?
Source: XRP/USDT on TradingView
XRP bulls found steady ground at $0.3320, allowing them to front a strong recovery rally in January 2023. The support was also crucial in preventing the drop after the FTX saga. However, the rally faced rejection above $0.4200, setting XRP to drop and form a descending channel (white).
Since mid-January, price action has oscillated within the channel, allowing investors to seek gains at the upper and lower boundaries. Attempts to break above the channel have failed so far, with the 200-day MA (Moving Average) and 50-day EMA (exponential moving average) acting as key obstacles above the upper boundary.
If BTC blasts beyond $27K, XRP could close above the channel and clear the 50 EMA ($0.3797) obstacle. A pullback retest on the upper boundary could offer new buying opportunities targeting the 200 MA ($0.3990). If bulls bypass the 200 MA, $0.43 could be the next likely target.
However, a close below the channel’s upper boundary and 50 EMA ($0.3797) could attract bears to sink XRP towards $0.3589 or $0.3377 (channel’s lower boundary). These levels could act as short-selling targets, especially if BTC drops below $27K. However, an extremely bearish scenario could devalue XRP below $0.3320 and possibly retest June 2022’s lows of $0.30.
The Relative Strength Index (RSI) dominated the lower ranges since mid-February, showing limited buying pressure in the same period. But the OBV (On Balance Volume) fluctuated in the same period, which could undermine a strong and convincing breakout above the channel.
Is your portfolio green? Check out XRP Profit Calculator
ChatGPT’s shortcomings and strong points
The possible price action and levels on the aforementioned daily chart exhibit wide deviations from ChatGPT’s price prediction of XRP. For instance – The unlimited ChatGPT version claimed that the highest value of XRP in 2022 was about $10, but it was below $1 in reality.
Although the classic version offers fairly correct values for the historical price data, it is constrained to information up to September 2021 and is limited from offering price predictions. As such, human input is necessary to make sense of the data’s quality to carry out proper fundamental and technical analysis. In particular, leveraging live price action data to gauge XRP price prediction may require augmented intelligence for better outcomes.
Nevertheless, a robust understanding of the SEC’s Ripple lawsuit and underlying market sentiment show ChatGPT is a great tool in fundamental analysis.
Conclusion
ChatGPT is bullish on XRP, despite the overwhelming market uncertainty amidst regulatory pressure. The AI model could revolutionize cryptocurrency price analysis and trading. Its apt fundamental analysis of XRP can save beginner traders the time and effort needed to understand the asset. However, its limited knowledge and inability to handle live price data can limit traders in maximizing the AI model’s true potential.
In the meantime, traders can learn more about ChatGPT to create and test trading strategies to improve trading performance and outcomes. It could offer traders a leg up, especially when dealing with riskier assets like XRP. Especially as they face a lot regulatory pressure.
