A significant dip in XRP daily trading volume has caught the attention of investors and analysts alike. On Thursday, XRPโs trading volume plummeted to levels not seen in the past six years, a development that has raised eyebrows among crypto enthusiasts.
On this day, December 21st, #XRP : pic.twitter.com/ptHRTpkEeE
โ WrathofKahneman (@WKahneman) December 22, 2023
Just XRP Or Industry-Wide Slump In Trade Volumes?
Reputed lawyer and XRP advocate, Bill Morgan, took to X (formerly Twitter) to shed light on this concerning trend highlighted by WrathKahneman. According to WrathKahneman, the trading volume of XRP on December 21 stood at approximately 1.9 billion, a stark contrast to the $2.4 billion witnessed in 2022 and drastically lower than $19.3 billion recorded in 2020.
What is most interesting or concerning about those figures is the daily XRP volume is lower on this day for this year and not this day in any of the previous 6 years. https://t.co/oQpr7avC54
โ bill morgan (@Belisarius2020) December 22, 2023
This decline has sparked a debate over the implications for the tokenโs market dynamics and investor sentiment. While the decline in XRPโs trade volume has become a focal point for discussions, it is important to note that this trend isnโt isolated to XRP alone.
Mr. Huber, a recognized figure in the crypto world, pointed out that leading cryptocurrencies such as Bitcoin and Ethereum are also experiencing similar plunge in trade volumes. This broader market trend suggests a possible shift in the trading activities across the crypto landscape.
Media reports corroborates Mr. Huberโs assertion, indicating that Bitcoinโs trade volume as of August 28, 2023, had reached its lowest in four years. This pattern, reflected across multiple major cryptocurrencies, hints at a more complex market dynamic that extends beyond XRP.
XRPโs Current Market Performance
Despite the concerns over trading volume, XRP has exhibited resilience in its market price. Over the past 24 hours, the digital asset has seen a near 1% increase, with its trading price hovering around $0.61.
Although it experienced a 4.6% decline over the past two weeks, XRPโs performance over the past month shows a 3.8% increase. Currently, its trading volume has continued to decline further standing at about $1.3 billion, maintaining a relatively steady state compared to last Fridayโs $1.2 billion.
Furthermore, Mr. Huberโs observation that the downturn in trading volume isnโt unique to XRP was echoed by another user, MoonLambo on X. This user, responding to Bill Morganโs post highlighting what could be either interesting or concerning, supported Mr. Huberโs view by adding, โI disagree.โ
MoonLambo disclosed that there is nothing concerning and that the plunging trading volume isย not unusual or worrying. They point out that considering the vast number of days (around 2,200) over the past six years, focusing on just six specific daysโ data is too narrow to draw meaningful conclusions.
According to their analysis of the all-time XRP/USD price chart, they note a consistent pattern where both XRPโs price and trade volume increase as market activity heats up. This pattern has been observed consistently over a decade, not only for XRP but also for other major cryptocurrencies like BTC and ETH.
MoonLambo further assert that the current state of XRPโs volume is typical and expect a significant increase in trade volume when XRP experiences its next market rally.
I disagree. This is not the least bit concerning. Nearly 2,200 days have passed in the last 6 years. Each day is a data point, and youโre only looking at 6 data points while ignoring the rest. You canโt draw a useful conclusion from such limited data here.
Look at the chartโฆ pic.twitter.com/lvEnRfKs8t
โ Moon Lambo (@MoonLamboio) December 22, 2023
Featured image from Unsplash, Chart from TradingView
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