XRP, the fourth largest cryptocurrency on the market, saw a notable flash crash on October 10th, falling towards $1.25, with a subsequent decline last week taking it down to $1.82.
Fast forward to the end of the month: the cryptocurrency has regained some ground and crossed the $2 mark in the last 24 hours. However, there are still obstacles that could hinder XRP’s rise, as noted by analyst Sean Williams of The Motley Fool.
The main catalysts behind the rise in XRP prices this year
Recently a reportWilliams noted that although XRP has risen 34% over the past year, compared to Bitcoin’s (BTC) 14% correction, the road ahead is fraught with challenges.
However, when examining the token’s price performance, which has outperformed the price performance of other top 10 coins thus far, Williams identified one of the most important catalysts for XRP to rise as it did last year when President Donald Trump was re-elected.
Additionally, resolving the dispute between Ripple – the company behind XRP – and the US government played a crucial role in boosting the value of the altcoin.
Approval to spot XRP Exchange-traded funds US-based exchange-traded funds (ETFs) have also contributed to its upward momentum, along with the growing interest of RippleNet, which is used by more than 300 financial institutions globally, some of which rely on XRP as a bridge currency for cross-border transactions.
Looking ahead, Wall Street analysts, including Standard Chartered’s Jeff Kendrick, have set an ambitious XRP price target of $12.50 by 2028, meaning a massive upside of over 500% for the altcoin in the next three years.
However, Williams warns that with a clearer understanding of the factors that have driven the cryptocurrency’s recent successes, several headwinds could derail, and perhaps send, its potential rally. The price goes back to $1 By 2026.
The main challenges ahead for altcoins
The critical challenge facing XRP in the coming year is the lack of new catalysts. Williams emphasized that with significant cash flows into these ETFs now tapering off, the leading altcoin may find it difficult to maintain momentum in 2026.
Another hurdle is the reality of altcoin adoption rates, which may not be as impressive as some proponents claim. While more than 300 institutions use it Ripple NetIt pales in comparison to the more than 11,000 institutions that use SWIFT for cross-border payments.
Given this landscape, the currency faces an uphill battle trying to replace SWIFT, especially since RippleNet does not require the use of XRP for transactions.
Additionally, while altcoins feature an average settlement time of three to five seconds – a significant improvement over traditional methods, which can take up to a week – altcoins such as Solana (SOL) and Stellar (XLM) also offer competitive transaction speeds.
Finally, the price of the token is also affected by broader stock market trends. While cryptocurrencies and stocks are typically separate trading assets, they have recently moved in tandem with Wall Street.
As evidenced by the S&P 500’s price-earnings ratio, which peaked at 41.20 in late October, the stock market appears historically overvalued. Williams asserts that if the S&P 500 undergoes a correction or bear market, cryptocurrencies, including XRP, will likely follow suit.
At the time of writing, XRP is trading at $2.19, recording a price recovery of approximately 9% over the past week.
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