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The rise and fall of XRP in particular has been quite compulsive in recent months. When Bitcoin reached its all-time high in mid-April, XRP held on to its three-year high ($1.7). Since then, the altcoin’s correlation with BTC has only grown stronger. In fact, XRP’s correlation with Bitcoin oscillated in the 0.20-0.38 range during the first three months of the year, but it was 0.8 at press time.
The aforementioned surge, for the most part, eliminates the possibility of XRP launching its own rally. XRP was trading at $0.590 at the time of writing, down 0.19 percent in the previous week. Is there, however, anything positive that traders can look forwards to in the coming days? To answer that question, it is necessary to conduct a temperature check of the alt’s on-chain metrics.
As shown in the attached chart, XRP’s network has seen a massive increase in development activity over the last 24 hours. In fact, the press time level has only been reached three times since February of this year. The increase in this metric was somewhat expected because the developer community has been actively experimenting with various things on the network.
For starters, they are currently working on the XRP Ledger (XRPL) and intend to enable new features and use cases.
At this point, it should be noted that Ripple is up against stiff competition from other protocols that facilitate cross-border payments, such as Stellar. As a result, for Ripple to stand out in the long run, the network’s development activity must improve from time to time.
Feelings in society
XRP has not seen a surge in both social dominance and social volume in recent weeks. In fact, at the time of writing, both of the aforementioned metrics appeared to be fairly stable. XRP’s social dominance level (0.394 percent ) at press time was nowhere near its late February (26.3 percent ) or early-April (18.36 percent ) highs.
Social sentiment has a significant impact on the price of any asset. As shown in the chart above, whenever XRP has dominated social media platforms, its price has risen in tandem. As a result, members of the XRP community will need to be more vocal socially in the coming days if this asset is to see a price trend reversal.
Volume, Volatility, Realized cap
At the time of writing, XRP’s real volume was hovering around November 2020 levels. At the time of publication, a figure of $166 million was nowhere near the alt’s mid-April volume of $10.26 billion. This essentially means that no traders are actively selling or buying this alt in the market.
To some extent, XRP’s declining volatility has also had a negative impact on its price. In fact, at the time of writing, this metric had a value of only 0.81. Notably, it was in the 2-2.7 range during the alt rally in April of this year. For the asset’s price to move at this point, traders must intervene, and volatility and volume must increase.
Furthermore, the realised cap indicator, which represents the realised value of all tokens on the network rather than their market value, has been declining in recent weeks. The same thing was clearly visible on Messari’s chart. This, once again, emphasises XRP’s unhealthiness.
Aside from development activity, most of XRP’s other on-chain metrics appeared to be fairly weak at the time of publication. As a result, an increase in the price of this alt in the near future appears to be a mirage for the time being.