Liquidity and Strategic Holding of XRP

While XRP allows users to make payments without holding it, this capability relies on others holding the asset. Active participants in the ecosystem ensure liquidity

Cryptocurrency XRP (CRYPTO:XRP) plays a unique role in the digital payments landscape by enabling seamless transactions without requiring users to directly hold the asset. This feature is particularly beneficial for those who prefer to minimize their exposure to XRP’s volatility while still enjoying the efficiency of cross-border payments.

However, this functionality is contingent on an active market where XRP holders collectively provide the liquidity necessary to match buyers and sellers efficiently. This highlights the relevance and strategic advantage of holding XRP for certain users.

Moreover, recent price trends and technical analysis offer insights into critical support and resistance levels, shedding light on XRP’s potential short-term price movements.

People Who Don't Hold XRP Still Benefit from It

Despite the capability of making payments with XRP without holding it, which is advantageous as it reduces exposure to volatility, it doesn't follow that people won't hold XRP.

For starters, the only way to directly exchange XRP for fiat currency at present is through centralized exchanges. While decentralized exchanges (DEXs) are emerging, they still face limitations in currency options and liquidity.

Secondly, XRP is designed to facilitate fast and low-cost cross-border payments. For users who frequently make international transactions, holding XRP can be more efficient than repeatedly exchanging between different fiat currencies or cryptocurrencies.

By holding XRP, users can quickly convert it into any fiat currency or other asset with minimal steps and at a lower overall cost compared to multiple exchanges.

Hence, while XRP can be used for payments without being directly held, the overall system and a vast majority of use cases still depend on XRP being held by someone. Without sufficient holders, liquidity will dry up, making on-demand transactions practically impossible.

Read also: XRP Rally Breaks Trendline, Top Trader Sets $5.85 and $8.76 Targets

Price Analysis: Resistance, Support, and Trend

XRP, trading at $2.47 at the time of writing, has experienced a decline of 4.82% over the last 24 hours.

The latest price action shows XRP encountering resistance around the $2.60 price level, where sellers are stepping in to exert strong downward pressure. Meanwhile, $2.45 has emerged as a critical short-term support level, with buyers showing interest to prevent further declines.

A bearish trend is evident in XRP’s price movement, characterized by consistent lower highs and lows. If XRP breaks below $2.45, we can expect further downside movement.

However, a move above $2.60 may indicate renewed bullish momentum, with the next resistance levels around $2.65–$2.70 coming into focus.

Technical Indicators and Market Sentiment

Technical indicators provide additional insights into XRP’s price movement. The 1-day RSI stands at 64.30, suggesting the asset is approaching overbought conditions without being excessively stretched.

Also, the MACD is trading below its signal line, indicating short-term bearish pressure.

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