Latest data from Kaiko, a blockchain analytics firm, reveals that while XRP prices are down 46% from July 2023 highs, its liquidity has significantly improved in the past two months, expanding 50% from $8 million to $12 million as of early September.
XRP’s Liquidity Rising
The jump in market depth follows a United States court ruling in July that negated the Securities and Exchange Commission (SEC) assertions that the coin was an unregistered security and that Ripple, the blockchain company that relied on the token on its On-Demand Liquidity (ODL) solution, had illegally raised billions in their initial coin offering (ICO).
According to market data, XRP’s market depth has steadily risen, indicating an increase in supply and demand at every price level. However, the analytics platform notes that the 50% jump in liquidity is happening during a sharp contraction in trading volumes and prices.
“While liquidity has spiked, it still needs to be determined whether buyers are stronger than sellers at any price point, a reading that could help traders determine the short to medium-term trajectory. In an environment with stronger buyers, it hints that demand is high, a development that could support prices going forward.”
Bears In Charge, Coin Down 46% From July Peaks
Price action data shows that XRP prices rapidly soared on July 13, rising nearly 100% from $0.47 to $0.933. However, prices have been cooling off steadily over the past two months, with XRP now changing hands at the early July 2023 zone. Despite this decrease, trading volumes remain within average when writing.
At present, it is not clear whether prices will recover from spot rates. However, it is apparent that XRP prices are still within the July 13 bull bar, providing an opportunity for buyers to enter the market if prices remain above July 2023 lows at around $0.45.
Furthermore, XRP is down 70% from April 2021 highs, indicating that bears are currently in control despite the current upswing that has shifted sentiment following last year’s dump that saw XRP drop to around $0.30.
While Ripple registered a partial win in the July ruling, buoying XRP prices, the SEC intends to appeal. Nevertheless, more analysts believe that the two parties will settle before the case goes to trial, which may further support prices.
Some experts note that this settlement will be in the best interest of the regulator since a trial will mean Ripple might call ‘Ethereum ICO Insider,’ Steven Nerayoff, as a witness. Nerayoff recently stated that Ethereum got preferential treatment during its initial coin offering (ICO).
Feature image from Canva, chart from TradingView
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