Ripple investors could face increased volatility according to this on-chain metric
With Ripple remaining in consolidation over the past two weeks, health provided on-chain data that shows a significant divergence between price action and network activity, which is generally seen as a signal of volatility.
Network activity indicators are generally strongly correlated with the price of an asset. With the rapid increase in asset value, traders and investors tend to move their funds more for a variety of reasons, including selling on the stock exchange, 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 activity of the network, the higher the risk 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 range of events which may or may not affect its price in a positive or negative way. 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 time of going to press, XRP is trading at $ 1 with continued consolidation in the $ 1 to $ 1.20 range. Network activity currently stands at an average of 52,000 active addresses.