The entire cryptocurrency market has recovered in the last few days after falling last week. XRP is getting closer to $0.20 as it leaves behind the $0.18 zone. Bitcoin (BTC) and Ethereum (ETH) are also moving higher. This shows that the entire crypto market is getting recovered. The main question is what will happen during the next months after the halving event on the Bitcoin network.
As we mentioned last week, XRP liquidity indexes reached new highs. This could be related to increased transfers as the Coronavirus crisis continues to hit countries. One good thing to take into account is the fact that economies are starting to re-open. That means that we may see increased economic activity in the coming weeks.
That being said, XRP remains a risk-on asset – which of course has utility. The entire crypto market is still depending on how the world economy moves forward. The larger the economic activity, the highest are the chances XRP could move higher.
Economies Re-Open After COVID-19 Crisis
Countries all over the world are planning to start re-opening their economies. This is due to the fact that it is not possible to keep with the economic activity totally stopped. Millions of individuals in different countries have lost their jobs. Moreover, many firms went bankrupt and many others could follow if people don’t start earning again.
Although this is something positive for the entire market, the effects could come in the coming weeks. Indeed, closing the economy has almost instant effects. Re-opening a country, stores and shops make take longer. This is also due to the fact that many activities would have to wait even longer before they can recover.
XRP will play an important role in the remittance market as soon as some countries start working again. Work-from-home is not an option for many workers. These individuals could start moving the XRP remittance market which has been growing in the past few weeks. This could also have a positive impact on the price of XRP, the third-largest cryptocurrency.
Larger economic activity means higher remittances. This is why Ripple should be paying close attention to how the market develops. Moreover, the firm must continue working and searching for new opportunities to leverage after this crisis.
Cryptocurrency Market Reactions
As previously mentioned, the cryptocurrency market has been following traditional markets. The COVID-19 crisis hit hard everyone and the crypto market has been hit as well. Speculative investors have been searching for safe-haven assets rather protect their wealth. Furthermore, many prefer to remain liquid among periods of uncertainty.
In addition to it, holding strategies may be close to an end if the current economic crisis continues. Many companies and large investors could sell their positions if they need funds to pay for basic needs. The same could happen to retail investors and their crypto holdings.
This is why it is certainly important to see how the market behaves in the coming weeks. Economic activity should start moving once again and reduce these massive sell-offs.
XRP Liquidity indexes have been growing in the last weeks and it will certainly be important to follow their trend. A growing trend would indicate the market could be recovering. However, a slowing and falling trend may already not be bullish. Indeed, this could mean a smaller XRP remittance market.
The last reports released by the Liquidity Index Bot do not show very positive signs. Despite that, this could be just a retracement from recent highs. As economies start opening again, we may see some pending payments to be processed in the next weeks.
Perhaps the worst performance this week was from Coins.ph, which provides liquidity for the XRP/PHP trading pair. Indeed, it fell from 11,508,218 XRP to 6,492,062 in just a few days.
Moreover, we need to take into account the Bitcoin halving that is going to happen in 23 days. In this way, Bitcoin will reduce the new issuance of coins from 12.5 BTC to 6.25 BTC per block. This is certainly going to have a positive effect in the long term on the Bitcoin network. Despite that, the first days after the halving may be negative for the crypto market.
If Bitcoin starts moving higher, digital assets such as XRP could follow. There may be newcomers trying to purchase some digital assets and people moving from BTC to altcoins. However, this may happen once Bitcoin expanded rather than immediately after the halving.
Currently, XRP has a price of $0.1934 and a valuation of $8.53 billion. In the last 24 hours, XRP expanded its valuation by 1.33%.