Ripplehas been in a consolidation phase for the past two weeks and is trading in a relatively narrow range. Besides, centimentpointed to on-chain data showing a significant divergence between price action and network activity, which is often considered a sign of volatility.
📊 $XRP is getting increased social media attention, & our data objectively shows that there has been a significant rise in addresses interacting on the #XRPNetwork in the month of October. Historically, these divergences inevitably lead to price upticks. https://t.co/eUFQhF1IEm pic.twitter.com/Oh1rAogOgo
— Santiment (@santimentfeed) October 26, 2021
Network activity indicators are often strongly correlated with the price of an asset. With the asset’s value rising rapidly, traders and investors tend to move their assets more for a variety of reasons, including selling on exchanges, payments or redistribution.
same rule XRP It also applies to. In the network activity/Price graph, we can clearly see the order of movement between the two metrics. The higher the network activity, the higher the chance of volatile movements in the trading pair.
While metrics are useful in determining whether the market will experience increased volatility, they cannot be considered a directional indicator as they do not indicate whether an asset will move in one direction or the other. But as Santiment points out, “Historically, these differences can inevitably lead to price increases.”
Ripple is currently going through a wide variety of events that can positively or negatively affect its price. Since the SEC’s actions against the company, the asset’s value has tripled, which is a positive sign for both the Ripple community and the crypto community in general.
At press time, XRP is trading at $1.03 with continued consolidation in the $1-$1.20 range. Network activity currently averages 52,000 active addresses.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.