XRP price braves growing headwinds as Ripple holders expect short-term buying pressure


  • XRP price could recover further this week with the break above the descending channel. 
  • Ripple CTO David Schwartz says an AMM will turn XRP price volatility into yield.
  • Schwartz explains that the XRPLedger based market maker will harvest volatility, promoting buying pressure during price decrease.

Ripple XRP price began recovery this week. A leading catalyst driving the altcoin’s price recovery is the anticipation of an increase in buying pressure on the altcoin, XRP, with the Automated Market Maker (AMM) that is set to go live on the XRPLedger.

Ripple CTO, David Schwartz, expects a short-term increase in buying pressure on XRP, following the launch of AMM. 

Also read: Gary Gensler is a hammer and everything looks like a nail: Ripple CEO Brad Garlinghouse

XRP price likely to experience buying pressure from holders

Ripple released a new version of the XRPLedger (XRPL) early on Wednesday. The version, 1.12.0, has been released and all XRPL server operators are set to upgrade to the latest version to vote for amendments. 

David Schwartz recently commented on an AMM going live on the XRPL, informing his 463,300 followers on X that he expects a short-term increase in buying pressure on the altcoin. An XRP community member shared his concerns on the likely decline in the altcoin’s price in the rebalancing of the AMM’s pools.

Schwartz addressed the concern and explained that the AMM is likely to draw mainly from XRP holders. This could mean a short-term net increase in selling pressure. However, ideally, as AMM harvests yield, buying pressure could increase during price decreases.

In theory, an AMM should reduce volatility by selling into price increases and buying during price decreases, allowing for yield harvesting. 

XRP price recovers this week

XRP price is facing headwinds in its recovery this week. Lockridge Okoth, crypto analyst at FXStreet, noted that XRP price successfully broke above a bearish falling channel. If XRP price continues to hold above this channel, it could flip the $0.4600 level into support.

XRP/USDT 1-day price chart on Binance

XRP/USDT 1-day price chart on Binance

Ripple price faces resistances at the 200-, 100-, and 50-day SMAs acting as resistance levels to cap the upside potential for XRP at $0.5107, $0.5666, and $0.5753,respectively. A decisive break below the midline of the channel at $0.4191 would invalidate the bullish outlook for XRP bulls.

Cryptocurrency metrics FAQs

What is circulating supply?

The developer or creator of each cryptocurrency decides on the total number of tokens that can be minted or issued. Only a certain number of these assets can be minted by mining, staking or other mechanisms. This is defined by the algorithm of the underlying blockchain technology. Since its inception, a total of 19,445,656 BTCs have been mined, which is the circulating supply of Bitcoin. On the other hand, circulating supply can also be decreased via actions such as burning tokens, or mistakenly sending assets to addresses of other incompatible blockchains.

What is market capitalization?

Market capitalization is the result of multiplying the circulating supply of a certain asset by the asset’s current market value. For Bitcoin, the market capitalization at the beginning of August 2023 is above $570 billion, which is the result of the more than 19 million BTC in circulation multiplied by the Bitcoin price around $29,600.

What is trading volume?

Trading volume refers to the total number of tokens for a specific asset that has been transacted or exchanged between buyers and sellers within set trading hours, for example, 24 hours. It is used to gauge market sentiment, this metric combines all volumes on centralized exchanges and decentralized exchanges. Increasing trading volume often denotes the demand for a certain asset as more people are buying and selling the cryptocurrency.

What is funding rate?

Funding rates are a concept designed to encourage traders to take positions and ensure perpetual contract prices match spot markets. It defines a mechanism by exchanges to ensure that future prices and index prices periodic payments regularly converge. When the funding rate is positive, the price of the perpetual contract is higher than the mark price. This means traders who are bullish and have opened long positions pay traders who are in short positions. On the other hand, a negative funding rate means perpetual prices are below the mark price, and hence traders with short positions pay traders who have opened long positions.


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