- Growth on Ripple’s network has not been very exciting lately, despite a partial victory against the U.S. Securities and Exchange Commission (SEC) in July.
- At the time of writing, XRP
’s Open Position dropped to $475.08 million. High Open Position indicates increasing trader confidence in price movement.
- Although it has progressed towards becoming the fifth largest asset in terms of market value, XRP’s performance in the past seven days has remained almost the same.
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Recent decrease in Ripple’s network activity; Are XRP traders hopeful for an increase? Current metrics!
Decrease in Ripple’s Network Growth
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Growth on Ripple’s network has not been very exciting lately, despite a partial victory against the U.S. Securities and Exchange Commission (SEC) in July. According to Santiment, network growth dropped to level 420 at the time of writing. This metric, which was above 2,000 in the last week of July, was disappointing in its current state.
Network growth measures the adoption rate of an asset by considering new addresses interacting with the underlying network. Therefore, an increase in network growth implies an increase in adoption.
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However, the decrease in XRP from this perspective indicates that new addresses are not rushing to the Ripple network. And for participants, XRP transfers have not been impressive. Like network growth, XRP’s seven-day active addresses also experienced a significant drop on August 19.
Since then, active addresses have stabilized at around 85,800. Active addresses indicate the level of speculation around a token. Therefore, the decrease indicates that there are very few different addresses participating in the token’s transfers or trading.
The lackluster interest in XRP has also spread to the futures market, as indicated by Open Position. Open Position, as an indicator to determine the market sensitivity and strength behind prices, takes into account the total number of futures contracts held daily.
Short-term doubts, positive for the long term
At the time of writing, XRP’s Open Position dropped to $475.08 million. High Open Position indicates increasing trader confidence in price movement. On the other hand, a decreasing Open Position indicates that traders are either unaffected or skeptical about the direction of an asset’s price.
This decrease indicates a decrease in the liquidity of contracts tied to the token. And if the Open Position continues to decrease, it may mean that there may not be enough strength to support XRP above $0.51.
Although it has progressed towards becoming the fifth largest asset in terms of market value, XRP’s performance in the past seven days has remained almost the same. According to data, the token’s value was determined as $0.51, representing an almost 1% increase during the mentioned period.
However, regardless of performance, it appears that traders may be more inclined towards a bullish outlook in price movement than a bearish one. An indicator that confirms this trend is the funding rate. Funding rates are paid between traders with short and long positions to keep their contracts open.
A positive funding rate indicates that more traders expect the asset price to rise by taking long positions.
On the contrary, a negative funding rate indicates that more traders have a bearish outlook. In the case of XRP, the funding rate was 0.001, which means that the long-term performance of XRP is expected to increase in price, not the opposite.