Story Highlights
XRP’s price is heavily influenced by its utility in institutional settlements, not retail activity.
Institutions using XRP for settlements need deep liquidity to avoid transaction failures, which will drive demand for XRP.
Ripple’s extensive network of partnerships and undisclosed agreements could significantly increase XRP’s demand and liquidity needs.
XRP is at a crucial moment as bulls defend the key $0.5785 support level. The price is consolidating and looking toward resistance levels at
$0.5920 and $0.600
. But the question remains: will bulls take charge and push XRP higher, or is another drop around the corner?
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This battle could set the tone for XRP’s next big move, with a chance for significant gains if key resistance levels are broken.
A lot of discussion on X about XRP price and how it will or will not rise in price. Let me offer some info on what will happen when banks are using XRP to settle large transactions on a daily basis. Here is how I see this playing out going forward….
— CryptoTank (@Tank2033js)
September 23, 2024
What’s Driving the XRP Price
?
Crypto analyst CryptoTank recently shared a detailed breakdown of the factors likely to impact XRP’s price. His analysis focuses on XRP’s role in settling large financial transactions, especially between major banks and institutions.
Utility vs. Market Cap
According to CryptoTank, it’s crucial to understand the difference between market capitalization and utility when it comes to XRP. Unlike traditional assets, the value of XRP is based on the volume of transactions settled on its ledger, divided by the number of coins in circulation. This means
XRP’s price
is tied to how much it’s used by institutions, not by everyday retail investors.
Why Deep Liquidity Is Critical for XRP
For banks using XRP for settlements, deep liquidity is essential. Big institutions like Bank of America, SBI, JP Morgan, and Swift settle about $25–30 trillion every day. If just 10% of that is settled with XRP, that’s around $3 trillion on the ledger. To make sure these massive transactions don’t fail,
liquidity pools
need to be even larger—likely double the transaction amount.
Transaction failures are costly and can cause delays that banks can’t afford. This is why XRP’s liquidity has to be strong enough to guarantee smooth and reliable settlements, making it a key factor in driving the token’s value.
Also Read :
Fed Rate Cut Impact on Bitcoin: Will BTC Price Break $65K?
,
Ripple’s Expanding Network
Ripple’s influence extends beyond a few banks. The company has more than 1,700 undisclosed partnerships, all of which could significantly boost XRP demand. CryptoTank explains that while only a few key players were mentioned, Ripple’s full network of partners could lead to even greater liquidity needs—and ultimately a higher XRP value.
A key takeaway from CryptoTank’s analysis is that retail investors have little influence on XRP’s price. Unlike most cryptocurrencies, XRP’s price won’t rise based on retail buying pressure because institutional settlements drive far more volume than retail activity ever could.
Why Chart Analysis Doesn’t Work for XRP
CryptoTank also points out that traditional chart analysis, used by many traders, doesn’t accurately predict XRP’s price movements. XRP’s value is determined by its utility and liquidity needs, which chart patterns alone can’t capture.
Whether bulls can hold their ground and push XRP to new highs remains to be seen.
Tags
Ripple (XRP)
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