In October, the XRP experienced a decline in price and expansion of the decentralized exchange (DEX) on its XRP Ledger (XRPL). On-chain operations increased as the token dropped to below $3, which was not the same case with the rest of the altcoin market recovery.
Statistics showed that the DEX trading in XRPL had risen to more than 900,000 compared to around 600,000 per day in mid-October. The pump was accompanied by general liquidations in the crypto market on October 10 and October 11. This saw a further decrease in the price of XRP to a price lower than $2.5 due to the large trading volumes that appeared during this time. Analysts considered the increased activity to be a sign of stress in the market and a possible rebound positioning.
It was also reported that as the decline occurred, large holders, commonly referred to as whales, sold approximately $50 million worth of XRP per day. These sales not only added pressure to the downward direction but also augmented volumes of trading in centralized and decentralized exchanges. The liquidity provided on DEXs helped the market to keep operating even when the prices were weak.
The XRP Ledger has been increasing its decentralized liquidity base over the last year, and this supports more efficient and transparent trading. Since October 2024, the level of decentralized liquidity has exceeded $20 billion per day on average, which indicates that the market is always active. The decentralized applications and traders also had a novel entry as the network was integrated with an Ethereum Virtual Machine (EVM)-compatible system.
One of the strongest liquidity peaks of XRPL occurred on October 10, with the decentralized liquidity surpassing the $40-billion mark. This growth was at a time when the crypto industry was very active, with traders reallocating positions in response to drastic market changes. Even with the increase, XRP was still under pressure due to long-term traders leaving the market, which would place further pressure on future prices in case liquidity reduces.
Derivative data also showed this trend, with the open interest on XRP moving to $1.27 billion as long positions reported slow growth. Traders were trading with caution and positioning long entries in the $2.30 area with a short limit.
The market entities are anticipating the volatility to continue since XRP is trading below the primary resistance levels. As the market switches to Bitcoin and macro conditions around the world, the future of XRP is conditional upon liquidity strength and the demand of the investors in decentralized markets in the near future.
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