According to Messari, XRP just had a startling $3 billion volume increase. The price of XRP did not increase proportionally with this jump, which aroused interest and a flurry of speculative activity.
The lacklustre price change the volume did not largely indicate purchasing support for the asset despite such a huge rise in volume. There are a number of plausible causes for this occurrence, including:
Sideways trading: A big quantity of sideways trading is one of the most popular interpretations of high volume without a meaningful price increase. This often denotes a market that is unable to decide between bulls and bears, which results in larger trading volumes but no change in price.
Sell-offs: A notable volume rise can be an indication of increased selling pressure. Although it may seem contradictory, a significant volume increase without a matching price increase may indicate that there is sufficient selling taking place to balance out the purchasing pressure, producing a net neutral price change.
Whale movements: Large holders, sometimes known as “whales,” may significantly influence trade volumes. Even without selling, their choice to transfer substantial amounts of XRP between wallets or exchanges might increase trade volumes. Volume data can easily distorted by a large transaction by a small number of influential investors.
substantial price movement can occasionally be preceded by a substantial volume increase. The market should be actively watched by traders and investors for any indications that current volume may be the quiet before the storm, portending a major breakout in either direction.
Understanding these probable causes might help investors make wise selections, even though it is still speculative to determine the underlying reason for such a volume rise without a corresponding price increase.
