While the XRP Army anticipates the automated market maker (AMM) functionality on XRP Ledger going live in a few days, a notable community figure has suggested XRP’s price could crash significantly.
XRP community investigator Mr. Huber has urged XRP holders to prepare for the asset’s potential reaction after the AMM finally launches. Mr. Huber drew inspiration from the occurrence with XRP’s prominent rival, Stellar (XLM).
XRP Crashing Like XLM After AMM
In particular, the investigator cited that XLM’s value collapsed by over 80% after its AMM functionality went live in late 2021. Notably, market data substantiate this claim.
Just to mentally prepare the XRPCommunity. Stellar dropped more than 80% after the AMM went live. It litteraly marked the top. https://t.co/qjHnUOQlNj pic.twitter.com/pA2tH0kc2k
— Mr. Huber🔥🦅🔥 (@Leerzeit) March 17, 2024
As of November 2, XLM traded at $0.3661. While the Stellar AMM launched the following day, XLM saw a brief spike that sent its value to $0.3915 about a week later.
However, a continuous downtrend that XLM never recovered from followed. The asset continued sinking month after month, reaching as low as $0.098 a year after the Stellar AMM launched.
Mr. Huber sees a similar scenario playing out with XRP, especially given XRP and XLM’s history of identical market performance. He pinpointed that the asset could tank to the $0.1 and $0.11 range.
The AMM has the potential to push the XRP price down to around 10-11 cents. pic.twitter.com/27fyh1gLUO
— Mr. Huber🔥🦅🔥 (@Leerzeit) March 17, 2024
While XRP trades around $0.57 at press time, the outlook translates to a potential 82% price collapse for XRP.
Community Reacts
Meanwhile, notable figures in the XRP community, including analyst Dark Defender, have contested Mr. Huber’s outlook. Dark Defender claimed XRP has become immune to news events. He cited instances where XRP performed notably without news and other cases of fair performance amid new events.
At the same time, some others expressed indifference about XRP’s potential performance after the AMM goes live.
XLM Crashed After AMM Due to Broader Bear Market
Notably, it is worth mentioning that XLM’s AMM launched exactly at the peak of the 2021 bull market, where the overall market became bearish. Essentially, XLM’s downturn after the AMM did not result mainly from the automated market maker.
Other commentators used this point to contest Mr. Huber’s view of XRP crashing 82% after the XRPL AMM became operational. In response, he highlighted that the current bullish phase has persisted for a while, implying the market is nearing the top.
Moreover, Mr. Huber countered the view of those who are bullish about the coming of the AMM by saying, “It doesn’t incentives holding; it incentives trading. And 50% of trading is selling.”
Why do you think that? It doesn’t incentives holding, it incentives trading. And 50% of trading is selling.
— Mr. Huber🔥🦅🔥 (@Leerzeit) March 17, 2024
As The Crypto Basic previously reported, the expected XRPL AMM is currently live on the test net. Recently, an XRP validator demonstrated the functionality to the public by deploying 20 XRP and 12 USDC in an XRP/USDC liquidity pool.
Ultimately, the XRP community expects the public availability of the XRP AMM in the next three days.
