XRP On-Chain Activity Slows, But Price stays very constant
In an article titled "XRP's Market Paradox: With Ledger Activity Dipping 80%, Is a Rebound on the Horizon?" a CryptoQuant analyst known as EgyHash has just offered his insight on the cryptocurrency during XRP's drop.
EgyHash claims that the on-chain and futures market data of XRP shows a mixed picture: falling activity but stability in price. XRP Ledger activity has dropped significantly since December, EgyHash observed, with the proportion of active addresses falling by 80%).
The futures market has seen similar reductions; open interest has declined over 70% from its highs and financing rates have sometimes gone negative.
He also said that the estimated leverage ratio—which measures typical user leverage by contrasting open interest with coin reserves—has also declined dramatically.
Although these metrics show declining momentum, the price of the cryptocurrency has only dropped around 35% from its highest point. This is a smaller fix than other assets, including Ethereum, which dropped almost 60% during the same time.
Furthermore, the Exchange Reserve of the cryptocurrency has been dropping until it reaches values seen in July 2023. Usually indicating that fewer tokens are accessible for immediate sale, lower reserves tend to sustain prices during market downturns by implying less availability of tokens.
EgyHash claims that this tendency, along with somewhat constant price, might point to increasing asset long-term trust.
Institutions Could Boost Market Mood
Although on-chain statistics continue to be of importance, institutional changes might also help to define XRP's future course. The first XRP-oriented investment vehicle in Asia, the HashKey XRP Tracker Fund was recently revealed by investment company HashKey Capital located in Hong Kong.
Supported by Ripple as the anchor investor, the fund is likely to become an ETF in due course. The project is meant to draw more institutional money into the XRP system.
