XRP: Everything, no congestion - why is there no demand for the altcoin?
XRP fundamentals are operating at full capacity, yet price movement remains weak.
On-chain data reinforces the likelihood of its value declining.
Ripple [XRP] has recently become the talk of the town, yet the market seems to be oblivious to it.
Despite the convergence of bullish macro and micro factors, the fear of missing out is still noticeably absent. It seems that all the main catalysts are impactful, but the market's reaction has yet to manifest.
Solving the Ripple Paradox
Ripple (XRP) closed April with a remarkable monthly return of 11%, but this was not solely attributed to the easing of fears and doubts at the market level.
Institutional investors have been actively accumulating Ripple coins, adding over 900 million Ripple coins to their holdings in just the past month.
Moreover, Ripple has achieved two significant milestones in the ETF space: the launch of the Ripple Instant Trading Fund in Brazil and the listing of Ripple futures on Wall Street. Is there institutional interest? Well.
And just when you thought the news cycle was starting to cool down, the stablecoin Ripple, RLUSD, received official approval from the U.S. Department of the Treasury.
This places it alongside giant stablecoins like USDC and USDT. Thus, it represents an important step forward in the realm of practical use.
However, it is strange that the overall market enthusiasm remains stagnant.
Is the market undervaluing XRP?
If you're wondering why XRP's value continues to decline despite all the bullish hype, the on-chain data might have the answer.
Initially, the creation of new addresses on the XRP ledger has sharply declined since December, even though price movement has returned to similar levels. What does this mean? Individual interest is not sufficient.
The matter is even more significant: daily active addresses have dropped by 46% since the beginning of the year, now standing at only 21,282. This is a clear sign that this rise relies more on experienced hands than on new faces.
And do you remember the massive outflows from Binance that exceeded 1 billion XRP five months ago? It has dropped to only 108 million, even lower than pre-election levels.
Ripple XRP outflows
Source: CryptoQuant
In short, the slowdown in activity indicates that investors are in a 'wait-and-see' mode, despite the growing list of bullish catalysts.
In the meantime, speculation continues to swirl, with bold calls for XRP to reclaim the $3 level in the near term.
However, with the absence of fear of missing out, the current situation seems more like a slow burn than a sudden rise. It's a traditional paradox in the cryptocurrency world: all the ingredients for a price increase are present, yet the public remains unenthusiastic.