Crypto Market Liquidity Rankings
A recent report from leading analytics platform Kaiko has unveiled that XRP outranks Binance (BNB), Solana (SOL), and Cardano (ADA) in terms of liquidity. Liquidity, or how easily a cryptocurrency can be bought or sold without significantly affecting its price, is vital in understanding its actual value.
The report challenges the traditional reliance on market capitalization alone and emphasizes the importance of liquidity as a key metric in evaluating a token’s true worth.
Top 3 Performers
In this liquidity ranking for this year’s third quarter, Bitcoin (BTC), Ethereum (ETH), and XRP are the three leading tokens. BTC and ETH have maintained their dominance in market cap and liquidity, solidifying their positions as leaders in the crypto market.
Despite BNB’s higher ranking in market capitalization, the report highlighted that its drop to the eighth position in liquidity is due to its primary liquidity being concentrated on the Binance exchange. On the contrary, XRP exhibited a higher liquidity score, ranking just behind Bitcoin and Ethereum.
This unexpected position of XRP showcases its strength amidst Ripple’s regulatory challenges within the US.
Insights In Liquidity Metrics
The report further noted that the liquidity of Dogecoin (DOGE), Cardano (ADA), and Solana (SOL) aligned closely with their market capitalizations. Litecoin (LTC) exceeded expectations by securing the fifth spot in liquidity.
However, some cryptocurrencies have huge disparities between their market valuations and liquidity. Such tokens include TON, Cronos (CRO), Shiba Inu (SHIB), Uniswap (UNI), and LEO. Meanwhile, Arbitrum (ARB), Ethereum’s layer-2 solution, surged by 25 spots beyond its market cap ranking, establishing itself among the top 10 most liquid coins.
The rankings considered several factors, notably spread, market depths at 0.1% and 1%, trading volume, and the number of exchanges with sufficient liquidity supporting each token. The study identified a greater number of liquid exchanges for a token as a factor that introduces complexity and makes activities such as oracle manipulation more difficult.
Furthermore, this report sheds light on the importance of liquidity in determining a cryptocurrency’s value. It offers a fresh perspective beyond market capitalization in evaluating the performance of digital assets in the ever-evolving crypto landscape.
XRP’s Price Struggles To Maintain Rally
Over the past 24 hours, current CoinMarketCap data highlights a 0.59% gain in XRP’s value, marking a rise to $0.6242. Presently, XRP’s weekly gains have narrowed to a modest 0.88%.
This year has been a rollercoaster for XRP, recording highs and lows. It recorded a notable surge of 20.1% in January, followed by a 7% decline in February. This cycle of growth and slumps persisted from March through August, with XRP’s trajectory being a battleground between bulls and bears.
However, September signaled a sustained uptrend. Although the gains from September to November have been moderate, they collectively hint that XRP would close the year in gains. The 2.78% growth this month showcases the coin’s resilience in navigating the month’s historical bearish trends dating back to 2017.
While retail investors have notably reduced their activity, evident in a 40.48% decrease in trading volume to $772.7M, more prominent market players’ actions could be vital to steering XRP towards the desired upward trajectory in its price.