Throughout 2023, XRP’s value has experienced a volatile journey, oscillating between highs and lows. While it showed intermittent growth between September and November, December brought a slight uptick of 2.78%, hinting at a possible shift from a bearish trend. As the year approaches its end, enthusiasts anticipate a potential year-end rally, banking on the actions of influential market whales amid decreased activity from retail investors.
Kaiko’s Liquidity Report: Redefining Token Valuation Metrics
Kaiko, an institutional-grade analytic platform, released a groundbreaking report for the top 40 assets that redefined the outlook of cryptocurrencies, particularly regarding liquidity. The report challenged the traditional dependency on market capitalization as the definitive measure of a token’s value. It underscored the importance of liquidity, volume, and market depth in determining the actual worth of a token.
XRP Leads in Liquidity Rankings
In Kaiko’s Q3 liquidity ranking, XRP stood out exceptionally. In the latest rankings, Bitcoin and Ethereum topped the liquidity charts as expected. But there were surprises: BNB dropped to 8th place, while XRP surged to 4th, thanks to recent US regulatory clarity. Dogecoin was in 5th place among meme coins, and Litecoin rounded out the top five despite a lower market cap. Conversely, AVAX and TON suffered significant drops in liquidity rankings compared to their market cap standings, alongside tokens like ATOM, UNI, SHIB, OKB, LEO, and CRO.
It’s all about Market Cap vs. Liquidity
The report also highlighted an exciting narrative between a token’s market valuation and its liquidity. For example, some tokens, like Litecoin (LTC), did better than expected regarding liquidity ranks. Others, like TON, had a huge drop in liquidity despite higher market caps. Also, Arbitrum, one of Ethereum’s layer two projects, quickly rose in the trading charts, showing its strong market presence.
To develop the rankings, they also looked at spreads, market depth at 0.1% and 1%, trade volumes, and the number of liquid exchanges that supported each token. This all-around method was meant to consider both high-frequency trading and long-term holding.
Impact of Liquidity on Token Integrity
The report emphasized the importance of diversified liquidity levels in preventing manipulative activities such as oracle manipulation. Tokens with higher liquidity and availability on more liquid exchanges, such as BTC, ETH, and XRP, boasted a significant advantage over other tokens.
What Next?
XRP holds steady at $0.62, showing resilience with a 0.3% gain despite a 1.1% drop against Bitcoin. Ranked sixth by market cap at $33.7 billion, XRP maintains a strong 24-hour trading volume nearing $596.8 million.
Is XRP’s steady resilience a sign of potential growth amid market fluctuations? Only time will tell.
Source: https://coinpedia.org/news/xrp-outperforms-bnb-solana-and-cardano-in-the-latest-liquidity-rankings/