XRP’s market depth rises despite uncertainty
- Within three months, XRP’s liquidity increased from $8 million to $12 million.
- XRP daily transactions dropped as optimism turned the other way round.
According to Kaiko, Ripple’s [XRP] liquidity went up by another $4 million between its partial victory in July and the beginning of September. From the post shared by the digital asset data provider, XRP’s market depth in July was around $8 million.
$XRP liquidity has improved significantly after July’s court ruling in the Ripple/SEC case. Market depth rose from an average of $8mn in June to $12mn in early September, even as XRP's price and volume has declined. pic.twitter.com/WtWqcVhKb5
— Kaiko (@KaikoData) September 18, 2023
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However, in early September, it had increased to $12 million.
High liquidity has not saved the day
Usually, cryptocurrencies with solid market depth have strong volumes. This allows traders to place large orders without significantly affecting the market price.
Interestingly, the increase happened despite a notable decline in XRP trading and on-chain volume. Also, XRP experienced a subsequent fall in its price.
One reason XRP has been unable to repeat its tremendous performance is the uncertainty surrounding its court case with the U.S. SEC. Although it is no news that the SEC has decided to appeal the decision, the ripple effect has been a massive slowdown in the XRP Army’s enthusiasm.
The decrease in the buzz surrounding the token was evident in XRP’s social dominance. As a metric built on top of social data, social dominance measures the discussion about an asset compared to other top 100 assets.
As of 15 July, XRP’s social dominance was a whopping 13.48%. However, the same metric fell to a mere 2.05% at press time, meaning that the initial hype around the token was almost non-existent.
Like social dominance, sentiment around XRP remained in the negative zone as well. Weighted sentiment considers the unique social volume as per the positive/negative commentary linked to a cryptocurrency.
At the time of writing, XRP’s weighted sentiment was -0.144. This suggested that a large part of the crypto community was not excited about the token’s short-term price action.
Not yet time to go long
For traders who are on the lookout for XRP’s next direction, it might not be a great time to long the token. This was because of the sentiment shown by the funding rate. At the time of writing, the funding rate was -0.004%.
Typically, positive values of the funding rate imply that traders are bullish. But when the funding rate is negative, it means traders are opening contracts targeting a price decrease, and that was the case with XRP.
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In the active addresses corner, Santiment showed that the number had decreased to 60,600 at press time. Active addresses indicate the daily level of interaction or speculation around a token.
Therefore, the decrease meant that the number of unique addresses involved in XRP transactions daily had been reduced.