XRP recently experienced a significant price surge, attracting widespread attention in the cryptocurrency market. Despite its large market capitalization, it achieved substantial gains in a short time. Over the past eight weeks, XRP has recorded an over 190% increase in value. To put this into perspective, Bitcoin took the entirety of 2024 to achieve a 124% gain. This comparison highlights XRP’s ability to achieve price growth at an accelerated pace compared to Bitcoin. XRP’s Price Movements Require Less Capital Crypto analyst Dom attributes XRP’s rapid price movement to low supply and thin order books. He emphasized that market capitalization alone does not dictate the ease of price movement. Instead, the liquidity in the order books plays a critical role. In an analysis shared on Twitter, Dom used data from Binance perpetual markets to demonstrate the disparity between XRP and Bitcoin in terms of the capital required for price shifts. According to his findings, approximately 985 million USDT is needed to buy 9,040 BTC and push its price by 25%. Conversely, only 59.73 million USDT is required to purchase 19.88 million XRP and achieve the same 25% price increase. This analysis suggests that triggering a 25% price jump in XRP is about 16.5 times easier than doing so with Bitcoin. The thinner order book of XRP accounts for this disparity, making it more prone to price volatility. Very informative post I shared last month, check it below if you haven't Many wonder how $XRP , having such a large marketcap can move so quickly & much higher, and the simple answer is low supply and thin orderbooks Let me put this into perspective using Binance perp markets as… https://t.co/s55nsqOqZi pic.twitter.com/MNRnA8XcqI — Dom (@traderview2) January 14, 2025 Liquidity and Supply Dynamics in XRP’s Market Dom further explained that XRP’s price surges are heavily influenced by the fragile state of its order books. Limited liquidity on the sell side creates conditions where significant buy pressure can lead to sharp upward price movements. In these situations, prices rise quickly until they encounter substantial resistance from larger sell orders. He also noted that this phenomenon is particularly evident in lower-priced assets like XRP, which typically have smaller liquidity pools compared to higher-priced assets such as Bitcoin. Moreover, Dom highlighted the behavior of XRP holders as a contributing factor to the asset’s price dynamics. Many XRP investors have held the token for extended periods, enduring substantial volatility. As a result, they are less likely to sell after moderate gains, even during periods of rapid price increases. With many viewing XRP as undervalued, its holders often aim to retain the asset for long-term gains, limiting the supply available in the market. Implications for XRP’s Future Price Movements According to Dom, the interplay of supply and demand is at the core of XRP’s price action. He concluded that the current market conditions, characterized by constrained supply and thin order books, allow for rapid price increases when demand surges. However, he cautioned that resistance levels would become more apparent as larger sell orders accumulate in the order books. As XRP gains momentum, understanding the mechanics of its price movements provides valuable insights for traders and investors alike. The current dynamics suggest that liquidity and holder behavior will remain pivotal in shaping the asset’s market trajectory. Disclaimer : This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are urged to do in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses. Follow us on Twitter , Facebook , Telegram , and Google News The post Expert Explains Why XRP Price Rises Rapidly Despite Large Market Cap appeared first on Times Tabloid .
