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The reason behind the stagnation XRP price growth has remained a mystery, with many crypto analysts pointing to legal disputes and market volatility as key factors holding back its momentum. But even during favorable market conditions and after obtaining legal clarity after several Ripple Court wins against the US Securities and Exchange Commission (SEC), XRP still has saw no significant upward movement.
As a result, investors have questioned the cryptocurrency’s sluggish price growth, prompting one crypto analyst to provide a detailed explanation as to why XRP remains at a low price, barely showing signs of a viable rally.
Why XRP Prices Struggle to Gain Momentum
On October 13, a crypto analyst and researcher known as ‘Crypto Tank’ took to X (formerly Twitter) to discuss the reasons why the XRP price does not move. In the long X messagethe analyst explained that the XRP price was determined by dividing the volume of XRP actively used on the ledger by the circulating supply.
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According to Crypto Tank, XRP investors have the misconception that the total XRP in circulation is approximately 56 billion. However, this figure is misleading because much of the supply of XRP is held in various private wallets by large-scale holders, also known as “Whales.” This means that most of the supply of XRP is not actively used in the market, but is firmly held in these wallets.
The analyst revealed that what really matters Price movements of XRP is how much of the circulating supply is used to actively participate in transactions on the XRP ledger. Currently, only about 20% of the total XRP supply is actively involved in the XRP Ledger on a daily basis.
In order to use XRP to make transactions, it often needs to be combined with Automated Market Makers (AMMs)that provide liquidity during transactions. These liquidity pools are important for XRP to conduct global settlementsas only sufficient liquidity can facilitate these massive transactions, stretching into trillions of dollars. This need for substantial liquidity in the XRP ledger is what limits price movements.
This is clear after the analyst report The XRP Price Battle are more complicated than mere market volatility. The ongoing legal dispute with the SEC also creates uncertainty about any future price increases.
Analyst Reveals XRP Roadmap to $500
As we discuss the reasons why XRP price is stagnating, including Crypto Tank revealed a roadmap for how XRP could reach $500. The analyst explains that if XRP could become that wide adopted for global settlements like SWIFT, it could potentially achieve this price target.
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He revealed that an increase in market capitalization or retail investors would not matter as XRP would only rise to its expected price of $500 if it could handle large institutional trades through deep liquidity pools and AMMs.
Featured image created with Dall.E, chart from Tradingview.com