Ripple’s XRP Gaining Traction in Japan
Ripple’s XRP is making significant strides in the cryptocurrency market as 61 Japanese banks plan to integrate its technology into their payment platforms. Unlike the U.S. system Zelle, Japan is creating an entirely new platform using Ripple’s innovative technology from the outset. However, despite this promising adoption, XRP’s price has not yet experienced a substantial surge.
Why Hasn’t XRP’s Price Surged Yet?
According to Vandell, co-founder of Black Swan Capitalist, the reason lies in net inflow. While banks are indeed leveraging XRP, the volume utilized for liquidity and transactions is insufficient to drive up the price significantly. To witness a real price increase, there needs to be higher net inflow, which can be achieved through greater utility and wider adoption.
The Role of Liquidity Pools
In a discussion on the Digital Outlook channel, Vandell elaborated on the importance of liquidity pools. As demand for XRP grows and institutions begin using it as a financial instrument, they will buy and hold XRP, reducing the available supply. This scenario will eventually lead to a supply-demand shock as the limited supply gets locked up, thereby driving up the price.
Ripple’s XRP Supply Strategy
Moreover, Ripple has not released any XRP to exchanges since 2019, further tightening the supply over time. Although it is a gradual process, the combination of increasing adoption, liquidity usage, and limited supply could result in significant price movements in the future.
XRP Price Analysis
XRP has been experiencing a prolonged sideways correction since early July. The support level around 52.2 to 56.2 cents has been tested multiple times, indicating a potential breakout to the upside soon. If the correction continues, a push to 80-90 cents could be achievable. Key levels to monitor include 60.5 cents, 63 cents, and 66 cents, with a breakout above 66 cents potentially propelling XRP to 86 cents or higher. However, if XRP falls below 50.2 cents, the bullish scenario might weaken.
The Future of XRP
The future of XRP looks promising as more financial institutions adopt Ripple’s technology. The gradual increase in utility and the strategic management of XRP’s supply could lead to significant price increases over time. Investors and enthusiasts should keep a close eye on the adoption rates and market dynamics to anticipate future price movements.
