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On-chain data shows XRP has witnessed a huge wave of wallet creation recently, indicating an influx of users has occurred on the network.
XRP Network Growth Metric Has Spiked Recently
According to data from on-chain analytics firm Santiment, XRP has seen a huge spike in its Network Growth recently. This indicator keeps track of the daily total amount of addresses coming online on the blockchain for the first time.
A wallet is “online” on the network when it participates in some kind of transaction activity. As such, the addresses coming online for the first time would be those making their first transaction.
When the value of the Network Growth is high, it means a large number of addresses are joining the network. Such a trend can arise due to a number of reasons. New investors coming into the market and old ones who had sold earlier, making a return, both contribute to a rise in the metric. Similarly, existing users creating multiple wallets for a purpose like privacy also naturally contribute to the indicator’s growth.
In general, an uptick in the metric involves all of these factors simultaneously to some degree, meaning that whenever its value is high, some net adoption of the asset can be assumed to be occurring.
Now, here is a chart that shows the trend in the XRP Network Growth over the last few months:
As displayed in the above graph, the XRP Network Growth has observed a huge spike recently, implying a large number of new addresses have been created on the blockchain.
This uptick in wallet generation came alongside the crash in the asset’s price. In total, 21,595 new addresses made their first transaction for the first time in a 48-hour span, the highest level in 8 months.
Given the timing of the spike, it’s possible that new investors are swooping in to buy the XRP dip. The last time retail adoption occurred at a similar rate was in July.
Back then, retail FOMO coincided with a top in the cryptocurrency’s price. This time around, the asset has actually seen a rebound since the spike occurred, so it only remains to be seen whether the trend will continue.
XRP Price Has Made Some Recovery
Bearish winds have calmed a bit for XRP as its price has climbed back to the $2.3 level from its low on Tuesday. Though on the weekly timeframe, the coin is still down more than 10%.
Interestingly, the low around $2 during the market crash was right at the lower level of the consolidation channel highlighted by analyst Ali Martinez in an X post.
Sharing the chart, the analyst had noted that this $2 lower level could be where XRP can find support. So far, it appears that the line has been holding up.
Featured image from Dall-E, Santiment.net, charts from TradingView.com
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