- ChatGPT is bullish on XRP
- However, its limitations need moderation by the trader for best results.
XRP’s performance has been subdued since the US Securities and Commission [SEC] lawsuit against Ripple Labs in 2020. In fact, since the lawsuit, Bitcoin [BTC] Subsequent price rallies have not pumped XRP like other altcoins.
For example, BTC rose 30% in the last seven days, causing most altcoins to appreciate in double digits. However, XRP was only up 4.5% during said time period. It shows better price action analysis and trading results could become more difficult for XRP, especially for beginning traders.
It comes in an AI solution: ChatGPT, to be specific. OpenAI’s ChatGPT is a generative AI model that has gained tremendous traction since its initial release with use cases across many industries. Can it be useful in XRP price analysis and prediction? Well the answer is surprisingly simple.
Fundamental analysis of XRP using ChatGPT
We asked ChatGPT to give us a fundamental analysis of XRP and he provided a detailed answer, as shown.
Source: ChatGPT (Ripple fundamental analysis)
This is the shorter version of the answer:
Source: ChatGPT
Fundamental analysis is one of the basic ways to determine the intrinsic value of an asset. Given the US SEC’s ongoing lawsuit against Ripple Labs, it is key to understand the impact of decision scenarios on the value of XRP.
So, we went back to our AI partner and questioned him about his comprehension of the potential impact of demand on investors holding XRP.
Source: ChatGPT
As initially noted, the recent market rally has boosted XRP like the other altcoins. However, it has not appreciated much, which denotes the reservations of investors. The lawsuit has made investors nervous after it caused exchanges like Coinbase to remove XRP from their platform. However, if Ripple wins the case, the exchange recently hinted at plans to relist the active.
However, ChatGPT recognizes the difficulty of predicting the exact outcome and impact of the lawsuit.
“In general, the outcome of the SEC’s lawsuit against Ripple is uncertain and it is difficult to predict exactly how it will affect the price of XRP in the short and long term. Investors should carefully consider the potential risks and uncertainties involved before making any investment decision.”
We now know the fundamental analysis and market sentiment, especially from a demands standpoint. So how has XRP performed so far in the past? Can ChatGPT be useful on this front as well?
Extract XRP historical price data
Although historical data does not necessarily affect future price movements, price action is king in technical analysis. And past trends can offer crucial information. We ask ChatGPT to pull historical XRP price action data to accomplish this step.
The AI model provided a year-by-year breakdown of XRP’s price action from 2017 to 2021:
- At the beginning of 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 peaking, the XRP price began to decline and was relatively stable for several months before experiencing another rise in late 2018, reaching around $0.75 in November of that year.
- In 2019, the XRP price fluctuated between around $0.25 and $0.50 for much of the year before falling to around $0.20 by the end of the year.
- In 2020, the XRP price was relatively stable in the first half of the year, hovering between $0.15 and $0.25. However, in December 2020, the US Securities and Exchange Commission (SEC) announced a lawsuit against Ripple, alleging that XRP was an unregistered security. This caused the price of XRP to fall sharply, falling to around $0.17 by the end of the year.
- In 2021, the XRP price fluctuated, peaking at around $1.96 in April before falling again in May and June. However, in November 2021, the XRP price registered another surge, peaking at around $1.40.
The aforementioned result shows that XRP’s price action was largely determined by market sentiment and regulatory pressure. Additionally, the highs and lows of XRP over the past few years could act as key support or resistance levels going forward.
However, ChatGPT has limited access to information from 2021 or earlier. That makes it difficult to mine data beyond 2021, let alone make future predictions that OpenAI policy firmly forbids. ergo, we continue ChatGPT jailbreak techniques to circumvent some of these limitations to try to get modest XRP price predictions.
read ripple [XRP] Price prediction 2023-24
Pushing the AI model beyond the limitations of OpenAI does not guarantee the accuracy of the results. In fact, the classic version clearly stated that you don’t have access to data beyond September 2021.
Source: ChatGPT
However, the jailbreak version offers hypothetical results that can be misleading. For example, he claimed that the highest value of XRP in 2022 was $10.50. And yet the highest real value was $0.93 in March.
Source: ChatGPT
When asked about 2023 price predictions for XRP, both versions were bullish on the asset, citing corporate partnerships and increased user adoption.
However, they did not offer exact figures on it.
The current state of the XRP daily price charts: Is a breakout likely?
Source: XRP/USDT on TradingView
XRP bulls found stable ground at $0.3320, allowing them to face a strong rally rally in January 2023. Support was also crucial in avoiding the post-FTX saga dip. However, the rally faced rejection above $0.4200, causing XRP to fall and form a descending (white) channel.
Since mid-January, the price action has oscillated within the channel, allowing investors to seek profit at the upper and lower limits. Attempts to break out of the channel have so far failed, with the 200-day MA (moving average) and 50-day EMA (exponential moving average) acting as key hurdles above the upper bound.
If BTC breaks above $27K, XRP could close above the channel and clear the 50 EMA ($0.3797) hurdle. A retest of the pullback at the upper bound could offer fresh buying opportunities targeting the 200 SMA ($0.3990). If the bulls bypass the 200 SMA, $0.43 could be the next likely target.
However, a close below the upper channel limit and 50 EMA ($0.3797) could entice the bears to sink XRP towards $0.3589 or $0.3377 (lower channel limit). These levels could act as short sell targets, especially if BTC falls below $27K. However, an extremely bearish scenario could devalue XRP below $0.3320 and possibly retest the June 2022 lows of $0.30.
The Relative Strength Index (RSI) has dominated the lower ranges since mid-February, showing limited buying pressure over the same period. But the OBV (On Balance Volume) fluctuated in the same period, which could undermine a strong and convincing break above the channel.
Is your wallet green? Take a look at the XRP profit calculator
Deficiencies and strengths of ChatGPT
The possible price action and levels on the aforementioned daily chart show wide deviations from ChatGPT’s XRP price prediction. For example, the unlimited version of ChatGPT claimed that the highest value of XRP in 2022 was about $10, but it was actually below $1.
Although the classic version offers fairly correct values for historical price data, it is restricted to information up to September 2021 and is limited to offering price predictions. As such, human input is necessary to make sense of the quality of the data in order 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 results.
However, a solid understanding of the SEC’s Ripple lawsuit and underlying market sentiment show that ChatGPT is a great tool in fundamental analysis.
Conclusion
ChatGPT is bullish on XRP, despite overwhelming market uncertainty amid regulatory pressure. The AI model could revolutionize cryptocurrency price analysis and trading. His proper XRP fundamental analysis can save novice traders the time and effort required to understand the asset. However, their limited knowledge and inability to handle live price data can limit traders from maximizing the true potential of the AI model.
Meanwhile, traders can learn more about ChatGPT to create and test trading strategies to improve trading performance and results. It could offer traders an advantage, especially when it comes to riskier assets like XRP. Especially since they face a lot of regulatory pressure.