XRP Network Usage Rises While ETF Inflows and Price Momentum Fade
Transaction activity doesn’t correlate to price because most activity on the XRP Ledger doesn’t affect the supply/demand of Ripple (XRP).
XRPL Hits 30.5 TPS as XRP Remains Under Selling Pressure
While 928,521 transactions were attributed to creating orders on decentralized crypto exchanges (OfferCreate), transfers were only responsible for 21.6% of total transactions (301,226). Ripple’s network is being used disproportionately for orderbook additions compared to transferring value.
Bitcoin’s fall below $64K has impacted the crypto market as a whole. Tensions in the Middle East and rising oil prices have also recently discouraged investors.
US-based XRP ETP traders experienced net-zero interest 10 out of 17 business days in July. Without continuous ETF inflows, spot markets have lacked a tailwind from institutional investors.
For the immediate term, XRP needs to reclaim/resist above $1.05-$1.10. Conversely, if prices continue to establish lower daily candles below $1.00, $0.90 and $0.80 become risks.
XRPL On-Chain Activity Summary: Orders Accounted for 67% of Activity, Not Payments
According to data from XRPSCAN, the XRP Ledger recorded 1.39 million transactions on August 11, averaging about 30.5 transactions per second (TPS). There were 8,297 unique accounts active on the ledger daily. However, diving deeper into the composition of activity on the ledger shows why trading volume headlines did not alleviate selling pressure.
The number 1.39 million looks bullish at first glance. However, the XRP Ledger breaks down network activity into transaction types based on what they do. Here’s what the numbers looked like on August 11.
| Transaction Type | Count | % of Total |
|---|---|---|
| Offers Created (DEX Orders) | 928,521 | ~66.8% |
| Payments (Direct Value Transfer) | 301,226 | ~21.6% |
| Account Setups / Other | 160,253 | ~11.6% |
| Total Network Transactions | 1,390,000 | 100.0% |
The XRP Ledger’s native decentralized exchange (DEX) enables automated market makers (AMMs), liquidity providers and arbitrage bots to persistently post, update, or cancel limit orders. High OfferCreate volume indicates active orderbook maintenance and liquidity operations. It does not equate to net new fiat capital flows into XRP.
Since XRPL records each change made on a DEX as a separate transaction, algorithmic trading bots are able to submit millions of transactions each day without creating net buying demand for the asset.
Why Did XRP Drop Below $1?
Contributing factors behind the recent price action include:
- Macro Economic Weakness and Geopolitical Tensions: Tuesday’s selling in digital assets was widespread after Bitcoin plunged below $64,000. US-Iranian geopolitical tensions drove crude oil prices higher sparking fresh inflation worries ahead of key US Consumer Price Index (CPI) announcements. The resulting broad risk-off mood dampened demand for most altcoins.
- Soft Institutional ETP Activity: In July, US crypto exchange traded product flows signaled subdued institutional demand. Domestic XRP ETF desks experienced zero net daily inflows on 17 trading days this past month, causing the cryptoasset to continue relying on retail spot market liquidity during volatile times.
- Technical Support Test: $1.00-$1.05 has been XRP’s most significant area of support during the last couple of consolidations. As market momentum ran out, stop-losses beneath $1.00 were triggered, sending price quickly down to $0.9923 on a liquidity grab before spot buyers stepped in to buy the dip.
What’s Next After the $1 Rebound?
Market participants are trying to figure out if the break below $1 was a classic bear trap or the start of a more permanent structural failure:
- Bullish Case: Daily closes above $1.05 with follow through towards $1.09-$1.10 would establish that buyers held the lower threshold of the trading range.
- Bearish Case: Daily closes that fail to print above $1.00 and breach through support around $0.95 could see technical indicators make a play towards lower levels of structure around $0.90 and $0.80.
In order for this high throughput on the XRP Ledger to result in a long-term price increase, analysts are stating that future network growth should come from increased payment volume, account growth, and organic spot inflows instead of artificial buy and sell orders on the order book.
