Due to the new circumstances of the lawsuit with the US Securities and Exchange Commission, XRP and Ripple Labs have made headlines over and over again in recent months. However, this altcoin so far stands out for a different reason.
After a few weeks of voting, the official announcement called XRP Ledger’s proposal to reduce reserve requirements was approved on September 19th. Under the new necessary condition, the minimum reserve will be reduced from 20 XRP to 10 XRP. Therefore, users must hold a certain number of tokens when opening new accounts in the general ledger to protect the log from malicious attacks.
Reserve requirements can change if there is consensus among validators on the network. Such changes will be necessary when the price of XRP increases.
In addition, former Ripple CTO Jed McCaleb has not sold a single XRP coin since September 1, according to XRPscan. So far, his XRP wallet has the same 709.911.475.983699 tokens as at the beginning of the month.
The source: XRPscan
So will these factors contribute to the price of XRP rising again anytime soon?
The “withering” state of XRP
The past 24 hours have not been cheap for XRP. The sixth largest altcoin lost more than 11% in value. It is noteworthy that the price is now below the $ 1 mark.
XRP Price Chart | Source: Tradingview
The state of the NVT ratio appears to be in an interesting position at the time of writing. As can be seen from the graph below, the current level is at the July level, this ratio measures the ratio between market capitalization and transfer volume and is quite similar to the price / earnings ratio of the traditional financial world.
Adjusted NVT ratio | The source: Messari
A high NVT means that the network value is greater than the value transmitted into the network. Whenever that price skyrocketed in the recent past, the XRP price rarely reacted positively. Hence, expecting a bearish XRP trend reversal won’t make much sense at this point.
In addition, the risk-adjusted rate of return also appears to be falling at the time of going to press. It should be noted, however, that the Sharpe ratio has dropped from 9 to 2 in the last month alone.
Sharpe Ratio | The source: Messari
Plus, XRP’s Sortino Ratio also seems to be pretty low compared to other Altcoins (0.101). If you look at the graph, this ratio for SOL – the competitor of XRP – is currently 0.35. In fact, the Sortino ratio for other Altcoins like DOT and LUNA is also significantly higher at the time of going to press. Therefore, other altcoins are relatively better options than XRP in terms of upward and risk-adjusted returns.
Compare price Sortino | The source: Macro axis
After looking at the state of the above data, it is clear that the chances of the XRP price rising above $ 1.50 in the coming days are pretty slim. However, if the lawsuit turns out to be very positive, the token price should react optimistically.
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According to AMBCrypto