On-chain analytics firm Santiment has pointed out how utility spikes on the XRP network tend to precede bullish price action in the asset's price.
XRP Network Activity Lit Up Before The Latest Price Surge
In a new post on X, Santiment has discussed about some network activity-related indicators for XRP. The metrics in question are the Transaction Volume and Circulation.
The first of these, the Transaction Volume, measures the total amount of the cryptocurrency that's becoming involved in transfers on the blockchain every day. While this metric does provide a sense of overall activity occurring on the network, it may give a skewed picture of investor behavior.
This is because of the fact that not all transfers being made on the chain represent true economic activity. Many of them involve the same part of the supply, constantly in motion due to repeat trades or internal shuffling.
The second indicator, the Circulation, helps filter for these moves like these. This metric keeps track of the daily unique number of tokens being shifted on the XRP network.
By ‘unique,' what's meant here is that no matter how many times a particular coin becomes involved in transfer activity on the blockchain, it still contributes just one unit toward the indicator's value.
Now, here is the chart shared by Santiment that shows the trends in both of these XRP metrics over the last few months:
As displayed in the above graph, the XRP Transaction Volume saw a huge spike to $2.1 billion on August 1st. This 6-month high surge in the metric came as the asset's price was going through a drawdown toward a low near $2.70.
Alongside the rise in volume, the Circulation also registered a spike to 1.12 billion tokens, indicating that the transfer activity occurring on the network was organic.
Since this burst of activity on the blockchain, the cryptocurrency has witnessed some recovery. From the chart, it's visible that there have also been spikes in these indicators in the past that led into a price surge for the coin. “Utility spikes on the network consistently foreshadow price jumps,” notes the analytics firm.
In some other news, XRP broke out of a triangular channel on Thursday, as analyst Ali Martinez explained in an X post.
Generally, breakouts above a triangle's upper level are considered to be bullish signals in technical analysis (TA). And indeed, as the pattern may have foreshadowed, the asset has ended up enjoying a surge since then.
XRP Price
At the time of writing, XRP is floating around $3.29, up more than 7% over the last 24 hours.
