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Two pundits recently discussed the correlation between XRP price actions and bullish news, which sheds light on the coin’s growth rate relative to its peers.
The debate was sparked by on-chain sleuth Mr Huber (@Leerzeit), who called the XRP community’s attention to the fall in the price of Stellar (XLM) following the implementation of the AMM feature.
Notably, the Stellar network witnessed the implementation of Protocol 18 in November 2021, which ushered in an AMM feature. However, XLM collapsed 83% over a year after the feature went live.
Mr. Huber noted that he expects the price of XRP to follow the same path as XLM when the AMM feature is fully operational.
Popular crypto analyst Dark Defender countered these claims. He argued that the price of XRP typically does react to major news.
Claims and Counterclaims on XRP Growth
According to Dark Defender, despite filing the SEC lawsuit in 2020, an event considered bad news, the price of XRP still moved from $0.17 to $1.99. When the good news about the victory came in July last year, XRP moved mildly from $0.50 to $0.91.
Dark Defender also pointed out a trend in 2017 when no major news was recorded: the coin jumped from $0.002 to an All-Time High (ATH) of $3.84.
However, Mr Huber had a different take on these growth claims, as he noted that Dark Defender was comparing different time periods and types of news.
He believed the 2020 SEC lawsuit had an impact, as the price tanked by 80% in three weeks. He pointed out that following that dip, XRP never traded at the high of 2021, more than in 2018.
Commenting on the lawsuit victory, Mr. Huber noted that the news had an impact for a few days before the coin suffered a correction back to the price level before the news broke.
Aren't you comparing different time periods and types of news here?
Fact1. 2020 lawsuit: When the SEC filed the lawsuit, XRP dropped 80% in price within 3 weeks. Clearly the news had an impact. Even in the long term – XRP never again reached the high of 2021, let alone that of… https://t.co/4K26eBr3wE
— Mr. Huber🔥🦅🔥 (@Leerzeit) March 17, 2024
The on-chain Sleuth also highlighted how the rally of 2017 was triggered by the news of Ripple Labs’ implementation of escrow. To sum up his argument, Mr. Huber noted that XRP is best described as a hedge against deflation.
Timeframes Consideration
To solidify his position, Dark Defender said in follow-up posts that timeframes matter in price discourse. He highlighted that XRP cleared the deficit in 8 weeks despite the 80% slump in 2020 following the lawsuit. XRP went on to soar “1175% after the lawsuit dip while the lawsuit was ongoing.”
He countered the other claims raised as well, underscoring how XRP finds its balance in 8-week periods after a negative price event. Overall, he noted that the escrow claims cannot also be good news as they generally inflate the coin’s supply.