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XRP ledger (XRPL) is experiencing a peak onchain usage as a result of increased market activity. This has led to the velocity metric hitting a yearly high of 0.0324 as noted by CryptoQuant, a leading onchain analytics platform.
The XRP Ledger Transaction Boom
For context, the velocity metric measures how frequently XRP is being moved around the blockchain.
Per the insight, a velocity of 0.0324 implies that XRP is circulating at the highest rate so far this year on the Ledger. This suggests that traders are busy transacting with XRP at a time when ETF hype is at its highest level.
The development signals that holders of XRP are not stashing them away in cold wallets or holding on to them for the long term. This suggests high liquidity of the asset and might signal a shift is on the horizon. Generally, when XRPL records a spike, it could trigger upward price movement.
With traders and ecosystem whales very active, the flow of assets within the system could drive a price surge. Over the last 24 hours, XRP has climbed from a low of $2.15 to a high of $2.21, suggesting the coin has upside potential.
As of this writing, XRP has dipped slightly and changed hands at $2.17, representing a 0.91% decrease within the time frame. The trading volume has also momentarily dropped by 31.04% to $3.3 billion, which could be responsible for the price volatility.
If market participants rekindle their engagement as indicated by XRPL’s velocity metric, XRP could breach the $2.50 resistance level.
Institutions Add Momentum to Outlook
It is worth mentioning that the XRP Ledger is used for settlement arbitrage. Although the high liquidity registered does not mean there is a bullish accumulation going on, the current spike cannot be ignored.
The movement suggests holders are repositioning their assets in likely preparation for an upswing in price.
As U.Today reported, XRPL processed approximately 2.23 billion XRP payments on December 2. That marked the second-largest payment in a single day within the last 365 days. Most of the transactions were driven by institutional channels.
Market participants are closely monitoring the XRP Ledger's increased activity as it gives confidence that the high liquidity could easily result in price stabilization. Once this is achieved, XRP might begin its recovery.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team