During the marketwide pullback, XRP price fell below $1, any prospect of price increase?
Due to the developments in the lawsuit, XRP and Ripple Labs have been in the news for the past few months. However, the token got attention for a different reason. Because, during the fury of the cryptocurrency market today, XRP price has dropped more than 15%, trading around $0.9.
XRP/USD 4-hour chart | Source: TradingView
Is it feasible to expect XRP price to rise anytime soon dramatically?
The last 24 hours have not been in favor of XRP. The sixth-largest coin lost more than 12% of its value during the period mentioned above. Notably, the altcoin is trading below $1 at press time.
The state of XRP’s NVT ratio seemed to be at an interesting juncture at the time of writing. As seen from the chart attached above, the current level is at par with July’s levels. This ratio gauges the relationship between market cap and transfer volumes and is entirely congruent to the traditional financial world’s price-to-earnings ratio.
Whenever this ratio spiked in the recent past, the price of that altcoin rarely reacted positively. Therefore, expecting an XRP downtrend will not make much sense at this stage.
As can be inferred from the attached chart, the ratio for XRP’s struggling competitor, Solana (SOL), is currently at 0.35. The Sortino Ratio for XRP’s other peers like DOT and LUNA is also significantly higher at press time. Thus, in terms of upside and risk-adjusted returns, XRP peers present themselves as relatively prime picks.
After observing the state of the ratios as mentioned above, it can be seen quite clearly that the odds of XRP price rising above $1.5 in the coming days are rather slim. However, if some significant positive developments occur regarding the ongoing lawsuit, the token price is likely to react positively.
After several weeks of voting, as AZCoin News reported, the proposal to reduce the reserve requirement of the XRP Ledger was passed a day back. Under the new necessary condition, the minimum reserve has been lowered from 20 XRP to 10 XRP. Therefore, a certain number of tokens are required by users when they open new accounts on the ledger to protect the protocol from malicious attacks.
The reserve requirement can be changed if there is a consensus among the validators of the network. Such changes become necessary as and when the price rises. So, is it feasible to expect the XRP price to spike soon?
- XRP Is An Unregistered Security, But ETH Is Not, Peter Brandt Stated
- XRP Ledger Lowered The Minimum Reserve Requirement Of The Account Base