XRP’s Increased Network Activity Not Yet Followed By Price, Here’s Why It Might Be Bullish

XRP

Ripple investors could face increased volatility according to this on-chain metric

With Ripple remaining in consolidation for the past two weeks, Santiment has provided on-chain data that shows a significant divergence between price action and network activity, which is usually considered a volatility signal.

Network activity indicators are generally strongly correlated with the price of an asset. With the rapid increase of the asset’s value, traders and investors tend to move their funds more for various reasons, including selling on exchanges, payments or redistribution.

The same rule applies to XRP. On the Network Activity / Price chart, we can clearly see the order of movement between the two metrics. The higher the network activity is, the greater the chance of volatile movements on the trading pair.

While metrics can be useful in determining whether the market will face an increase in volatility or not, they cannot be viewed as a directional indicator as they do not signal whether an asset will move in either. other direction.

Ripple is currently going through a wide array of events that may or may not affect its price positively or negatively. Since the SEC’s actions against the company, the coin’s value has tripled, a positive sign for the Ripple community and the crypto community in general.

At press time, XRP is trading at $1 with continuous consolidation in the $1-$1.20 range. Network activity currently stands at an average of 52,000 active addresses.

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