The available XRP supply is reportedly dwindling as substantial amounts flow through Ripple’s On-Demand Liquidity (ODL) networks.
Simultaneously, significant holders, known as “whales,” are steadily amassing XRP, leading to a swift consolidation of the token by institutional entities.
This aggregation is diminishing the supply accessible to small investors, prompting a sense of urgency among those looking to enter the market.
With the window for individual participation closing, a crucial question arises: will this scarcity propel XRP prices upwards, or will it introduce market instability?
Is there a surge in active addresses and transactions?
The XRP Ledger is displaying signs of escalating network engagement. Currently, the count of active addresses has grown by 0.97%, reaching 9.339K.
Similarly, transaction volumes are on the uptick, with a 0.98% rise, totaling 1.6345 million transactions, as per data from CryptoQuant.
This uptrend suggests increased involvement and higher transaction quantities, indicating a rapid movement of XRP by whales. With the surge in transaction and address activity, the market might be gearing up for a supply-induced price hike.
How is the XRP exchange supply influencing market sentiment?
The exchange supply of XRP continues to shrink, with reserves decreasing by 0.26% in the past week to 2.977B XRP. A lower exchange supply commonly signals surging demand and a reduced number of tokens available for trading, potentially exerting upward pressure on prices.
Retail traders are encountering a fiercer environment as major holders persist in absorbing supply.
What insights does XRP’s liquidation data offer?
The liquidation data of XRP further reinforces the notion of a supply shortage. By September 21, 2024, long liquidations amounted to $49.78K, significantly outweighing short liquidations at $2.97K, indicating a bullish sentiment among traders anticipating price surges.
Nevertheless, the XRP market might witness sharp price swings due to diminishing supply and increasing long positions.
Will the shortage push XRP prices higher?
The rapid accumulation of XRP by whales and its expanding utility in ODL networks are limiting the opportunities for retail investors to secure tokens. With growing active addresses, rising transaction counts, and declining exchange supply, the market seems primed for a potential price upsurge.
However, the scarcity of XRP could also introduce volatility, underscoring the need for small investors to act promptly.