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Ripple’s Chief Technology Officer, David Schwartz, has added a new layer to the debate, suggesting that a higher XRP price could significantly improve transaction efficiency. As the token struggles to maintain its $2 support level, traders and investors are weighing the possibility of a sharp downturn or a long-awaited rebound.

Schwartz has ignited fresh debate in the crypto community with his perspective on XRP’s price and its role in transaction efficiency. Schwartz argues that a higher XRP price could significantly enhance the token’s utility within Ripple’s ecosystem by reducing the number of tokens required for large transactions.

“If XRP were worth $1, a $1 billion transaction would need one billion XRP,” Schwartz explained. “But at $10, only 100 million XRP would be needed. If it reaches $1,000, just one million XRP would suffice.”

Higher XRP prices reduce the amount of XRP needed for large transactions. Source: Brett via X

Schwartz’s reasoning suggests that an increased XRP price could make transactions on the Ripple ledger more efficient, minimizing liquidity demands and friction in cross-border payments. However, his prediction has sparked contrasting reactions among XRP supporters and critics alike.

While some XRP enthusiasts see Schwartz’s statement as a bullish indicator, others remain skeptical about whether utility alone can drive price appreciation. A user on X, known as ‘All Things XRP,’ raised concerns about the token’s velocity and how rapid transactions in Ripple’s On-Demand Liquidity (ODL) system might limit price growth.

XRP’s price target for this cycle is $5-$8, with higher predictions like $589, $1,000, or $10K being overly optimistic. Source: Tony Edward via X

Some analysts suggest that implementing Automated Market Makers (AMMs) or tokenization strategies could help restrict the circulating supply, making XRP scarcer and potentially increasing its value. However, not everyone is convinced that this mechanism alone can trigger a sustained rally. One crypto skeptic, known as ‘BUNNY’ on X, dismissed the speculation, stating, “Just another crypto fantasy. XRP’s speed and utility don’t automatically mean its price will rise.”

This division within the crypto community underscores the uncertainty surrounding XRP’s future valuation. While its adoption for payments remains robust, price projections hinge on broader market dynamics and investor sentiment.

XRP is presently undergoing a severe test at the level of support at $2. The general slide in the crypto market, coupled with economic uncertainty and regulatory challenges, has put bearish pressure on the asset. XRP recently experienced a sharp decline, triggering liquidations worth more than $3.94 million, according to Coinglass figures.

XRP is currently in a bearish trend, with $2.218 acting as key resistance, and a drop to $1.80 could occur unless it breaks above $2.218. Source: FenzoFXBroker on TradingView

Adding to the bearishness are also weak on-chain metrics. Data from Santiment reveals that XRP’s network growth metric has dropped significantly, reflecting lower adoption rates. Similarly, active addresses have declined from 10,200 in January to just 4,388, signaling reduced transaction activity.

Another concerning factor is the increasing total supply of XRP in circulation. Ripple’s monthly release of tokens from its escrow account continues to raise concerns about inflationary pressure, with critics arguing that this ongoing supply increase hinders sustainable price appreciation.

Despite short-term bearish indicators, some investors remain optimistic about XRP’s long-term potential. Historical patterns suggest that accumulation phases often precede major rallies. Long-term holders have been buying the dip, mirroring trends seen before previous price surges.

XRP’s long-term correction suggests liquidity buildup for a potential jump, though a lower breakout is also possible. Source: AMA_FX on TradingView

Looking at past cycles, XRP witnessed sharp sell-offs in 2017 and 2020, only to recover with strong uptrends. If the current consolidation phase follows historic trends, a recovery in price could be near.

Technical analysis shows that if XRP can maintain above $2, it will attempt to regain the $2.50-$3.00 range. If it fails to sustain support, however, it could lead to a further decline, with a potential drop to $1.20 if selling pressure rises.

As XRP rides out market fluctuations, traders are keeping a close eye on major support and resistance levels. The $2 level is an important psychological level, and a decisive break above $2.20 may portend fresh bullish momentum. However, in the event that bears force XRP lower than $2, the subsequent important support is at $1.95, with doomsday scenarios seeing prices tumbling towards $0.62, according to some analysts.

XRP’s price chart suggests wave IV completion, but a breakdown could indicate an expanded flat pattern with wave C unfolding. Source: AdamIdris2 on TradingView

Simultaneously, external influences such as regulatory progress and macroeconomic trends continue to impact Ripple’s market outlook. Putting the ongoing XRP lawsuit against the SEC to rest could be extremely important in regards to framing investor mood. Furthermore, projected partnerships, e.g., partnerships with major banking players such as Ripple Bank of America, can also serve as catalysts to renewed interest in the token.

Ripple (XRP) was trading at around $2.08, up 1.99% in the last 24 hours at press time. Source: XRP Liquid Index (XRPLX) via Brave New Coin

With conflicting messages in the market, the fate of XRP is uncertain. Whether or not Schwartz’s scenario of a rising XRP price comes to fruition will be influenced by a convergence of adoption, regulatory clarity, and market conditions. Traders and investors for now remain anxiously waiting to see as XRP balances precariously at a make-or-break price point.

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