XRP has been facing a market downturn for a while, dropping 23.99% in the past month. Its price at the time of press was $0.4787, which is closer to its value before the U.S. court affirmed that the digital asset is not a security.
Benjamin Cowen, the founder and CEO of Into the Cryptoverse and a veteran market analyst, has shared his perspective on XRP’s performance in a post on X.
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Captioning a chart showing the XRP declines, he pointed out that XRP had “retraced the move” that came after the court ruling, dropping back to its initial support level. He thereby pointed out that narratives don’t drive the market but Liquidity does.
$XRP has retraced the entirety of the move that came after the SEC vs. Ripple case.
Narratives do not drive the market, liquidity does. pic.twitter.com/8295jFRdHB
— Benjamin Cowen (@intocryptoverse) September 11, 2023
Narratives and the Market Trends
Cowen’s challenge of the idea that narratives alone can sustainably influence XRP’s price is hard to refute in this case. Although the lawsuit victory had a major impact on XRP, the impact was limited and didn’t do much to affect the long-term price trends.
The return to the price level before the lawsuit verdict is the clearest indicator of this argument. XRP erasing all the progress made in just a matter of months proves that the enthusiasm that comes from “narratives” is only short-lived. According to Cowen, liquidity is the key driver of the market.
XRP Community’s Response
Yassin Mobarak, founder of Dizer Capital and another prominent figure in the XRP community disagreed with Cowen. He replied, pointing out that the whole market is currently down, including Bitcoin (BTC) and Ethereum (ETH).
In response, Cowen pointed out that he had also predicted that BTC and ETH would drop.
We are on twitter, follow us to connect with us :- @TimesTabloid1
— TimesTabloid (@TimesTabloid1) July 15, 2023
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Mobarak replied stating that value isn’t currently reflected in the asset prices. He hopes that with the next bull run, investors will be mature enough so that value can be reflected in prices.
Cowen stated that this exact reasoning is why liquidity is more important but Mobarak pointed out that liquidity comes from demand. This demand in turn comes from a digital asset that has real-world use.
Cowen made the point that XRP wouldn’t have dropped if the utility was all that mattered, implying that XRP had real-world use but still fell back after its surge.
However, Mobarak stated, “The utility of XRP is not yet at real-world scale in terms of usage in global cross-border payments.” According to him, when it did, its value would match the price. This back-and-forth is a glimpse into the debate this post sparked among the XRP community.
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