Ripple XRP price started its recovery this week. A leading catalyst driving the altcoin’s price recovery is the anticipation of an increase in buying pressure on the altcoin, XRP, with the Automated Market Maker (AMM) that is set to go live on the XRPLedger.
Ripple CTO, David Schwartz, expects a short-term increase in buying pressure on XRP, following the launch of AMM.
XRP price likely to experience buying pressure from holders
Ripple released a new version of the XRPLedger (XRPL) early on Wednesday. The version, 1.12.0, has been released and all XRPL server operators are set to upgrade to the latest version to vote for amendments.
David Schwartz recently commented on an AMM going live on the XRPL, informing his 463,300 followers on X that he expects a short-term increase in buying pressure on the altcoin. An XRP community member shared his concerns on the likely decline in the altcoin’s price in the rebalancing of the AMM’s pools.
Schwartz addressed the concern and explained that the AMM is likely to draw mainly from XRP holders. This could mean a short-term net increase in selling pressure. However, ideally, as AMM harvests yield, buying pressure could increase during price decreases.
In theory, an AMM should reduce volatility by selling into price increases and buying during price decreases, allowing for yield harvesting.
