On-chain data shows that the XRP network has seen a flurry of activity and address creation recently, something that could turn out to be a bullish signal.
Active XRP addresses and network growth have been on the rise recently
According to data from the on-chain analytics company saintAddress-related indicators for XRP have been rising recently. The first relevant metric here is “Daily Active Addresses,” which tracks the total number of addresses that participate in some type of transfer activity on the network each day.
The unique number of active addresses can be considered the same as the number of users using the network, so the value of this indicator basically tells us how much traffic the chain receives.
Another interesting indicator is network growth, which measures the total number of new addresses created on the network every day. An address is said to be “generated” when it makes its first transaction on the blockchain.
While daily active addresses tell us about the utility of the network, the growth of the network provides information about how the cryptocurrency will be adopted.
Below is a chart showing the trend in daily active addresses and network growth for XRP over the past month:
The two indicators appear to have spiked high in recent days | Source: Santiment on X
As can be seen in the chart above, both active XRP addresses and network growth recorded a sharp increase over the past two days, which means network utility and adoption are rising.
In this latest surge of activity, the blockchain saw transactions from 35,799 unique users, the highest value since July. Likewise, 3,858 new users joined the network, a peak not seen since March.
Now, in terms of what these trends could mean for the asset, the answer varies between the two indicators. Adoption is usually a bullish sign in the long term, as a broader user base provides a more sustainable basis for future price movements to grow. On the other hand, a benefit is usually something that can carry short-term effects, as all the high trading activity from users can lead to fluctuations in the price of the coin.
This volatility can take the asset in either direction, depending on exactly what type of activity users engage in. The daily active headlines themselves do not contain information about this split, so it can be difficult to predict using this indicator alone.
Given that the spike in activity occurred during the currency’s consolidation, users are likely to make a buying impulse. If so, XRP could see the beginning of a new boom from this.
Ripple price
XRP has not been able to recover much from the collapse it suffered at the beginning of the month, with its price still trading around $0.544.
Looks like the price of the coin has been moving sideways over the last few weeks | Source: XRPUSDT on TradingView
Featured image from Dall-E, Santiment.net, chart from TradingView.com