The XRP Ledger (XRPL) is experiencing a surge in velocity, pointing to heightened activity and growing network utility. This trend could signal a potential XRP price rise.
What is XRPL Velocity, and Why Does It Matter?
Velocity measures how frequently a network is used by dividing market cap by transaction volume. CryptoQuant analyst Maartunn noted that XRPL velocity has risen significantly in recent weeks, suggesting an increase in network activity. This trend is often seen as an early indicator of price surges.
Currently, XRPL velocity is nearing resistance on a descending trendline, hinting at further growth in network usage and a potential price breakout.
XRP Price and Network Trends
The increase in XRPL velocity comes on the heels of XRP’s impressive price rally. The token surged from $0.5319 on November 6 to a peak of $2.82 by December 3, marking a 430% jump in less than a month.
However, not all metrics are positive. Since December 16, the total value deposited on XRPL has dropped nearly 20%, falling from $71.5 million to $58 million, according to DefiLlama. The decrease is tied to XRPL’s automated market maker (AMM) pools.
Developments Fueling XRPL Growth
Ripple Labs, the company behind XRPL, has been actively working to expand its ecosystem. Recently, Ripple launched Ripple USD (RLUSD), a stablecoin issued on the XRPL and Ethereum networks. This regulated token, pegged to the US dollar, aims to enhance network utility.
Traditional companies are also beginning to tokenize real-world assets (RWA) on XRPL. Ripple has partnered with Archax to create a money market fund managed by abrdn, further boosting the platform’s liquidity and use cases. Bitwise predicts that the RWA market could grow to $3 trillion, potentially driving long-term demand for XRPL.
