Data indicates a significant increase in liquidity contributions and governance interactions on XRPL’s DEX, with AMM deposit volumes rising by 62.35%.
Analysts are suggesting that the current XRP price pullback may be setting the stage for a rally, supported by XRPL’s expanding functionality.
The Automated Market Maker (AMM) on the XRP Ledger (XRPL) network is experiencing a substantial surge in trading activity. Its daily transaction volumes have increased by a factor of 40 compared to just a week ago. This 40x spike indicates a growing interest in XRPL’s decentralized trading framework. Additionally, many in the crypto community believe that the new liquidity and trading capabilities of the AMM feature are key drivers of this growth.
XRPL AMM Volume Spike
Influential crypto analyst Blockchain Backer recently highlighted this surge in AMM volumes, noting, “#XRP AMM volume explosion. Daily volumes are 40X what they were a week ago.” By allowing users to contribute liquidity across assets, the AMM offers a feature that appeals to both retail and institutional participants.
Since the AMM went live, XRPL has seen significant growth in both AMM-based transactions and decentralized exchange (DEX) activities. According to data from CryptoQuant, XRPL’s DEX has witnessed a 17.6% increase in volume over the past month as platform engagement surged, reported CNF.
Liquidity contributions within the XRPL have also risen significantly, with AMM Deposit volumes up by 62.35% and AMM Create activity surging by 143.1%. Governance interactions have seen a similar boost, with AMM Vote activity increasing by 65.22%, indicating active participation by XRPL’s community.
Many attribute this surge in activity to the AMM’s ability to support several trading strategies while offering incentives to liquidity providers through yield-earning opportunities. The added liquidity and flexibility could attract more users to XRPL as a decentralized alternative to CEXs.
Earlier this month, Ripple also launched its custody solutions on the XRP Ledger, as per the CNF report.
XRP Price Analysis & Potential For Growth
Alongside XRPL’s growth, XRP itself has been experiencing significant price fluctuations. On Friday, XRP briefly traded at $0.4935 amid a market downturn but managed to recover, reaching $0.5144 on Saturday. However, it fell back below the $0.50 mark.
Market analysts have observed that XRP recently broke out from a long-standing trendline. This breakout initially took place in August, with XRP moving from a low of $0.4335 to a high of $0.6416. Popular crypto analyst Random Crypto Pal shared his views on the current market situation.
He suggested that a major price movement might be imminent for XRP. He considered the recent XRP price dip a “perfect retest of both trend lines.” This implies that the latest XRP pullback could be setting the stage for an impending rally, according to the CNF report.
In September, XRP price hit a higher peak at $0.6622, its highest point since retreating from its annual high. However, October saw a decline to a two-month low despite analysts being convinced about an “Uptober.” Nonetheless, some analysts believe this downturn may only be temporary, as XRP price appears to be testing a key support zone.
With renewed momentum in XRPL’s AMM and DEX functionalities, Random Crypto Pal believes that an “explosion is incoming” for XRP price. Furthermore, Ripple’s ongoing development of projects like the RLUSD stablecoin could also contribute to growing interest in the XRP ecosystem.