On-chain data shows the XRP network has been observing significant daily address creation recently, a sign that adoption of the asset is occurring.
XRP Network Growth Has Registered A Rise Recently
According to data from the on-chain analytics firm Santiment, XRP has seen its Network Growth maintain at relatively high levels recently. The “Network Growth” here refers to a metric that keeps track of the daily total number of addresses that are coming online on the network for the first time.
A wallet is said to be ‘online’ when it participates in some kind of transaction activity on the blockchain, whether as a receiver or sender. Thus, the addresses coming online for the first time would correspond to the wallets that are making their very first transfer.
There can be a number of reasons behind an uptick in address generation. New investors joining the network and old ones who had sold earlier coming back both lead to a rise in the Network Growth. Similarly, existing users creating multiple wallets for a purpose like privacy can also contribute to the trend.
In general, all of these can be assumed to be simultaneously at play whenever the Network Growth spikes. In other words, some net adoption of the asset can be considered to have occurred.
Now, here is a chart that shows the trend in the Network Growth for XRP over the last few months:
The value of the metric appears to have been declined since its earlier peak | Source: Santiment on X
As displayed in the above graph, the XRP Network Growth saw a huge spike earlier in the month as the cryptocurrency’s rally took place. At the peak of this address creation spike on July 17th, 11,058 new addresses made their first transactions.
Since then, the metric has cooled off a bit, but it’s still maintaining at a value of around 7,500 addresses every day, which is significantly higher than the average for the last few months.
Generally, adoption is constructive for any cryptocurrency network as a wider userbase can mean a more solid foundation for price moves to grow on, but its effects may only be visible in the long term. It now remains to be seen how long the current high Network Growth values would continue and what role they will play in future price action.
XRP Has Plunged During The Past Day
While on-chain data may be showing a strong trend of adoption, the asset has witnessed a 7% crash over the last 24 hours as its price has come down to the $3.02 level.
Below is a chart that shows how XRP’s recent performance has looked.
The price of the coin appears to have lost some of its recent gains | Source: XRPUSDT on TradingView
As a consequence of the bearish price action, XRP has seen liquidations of around $24.4 million in the derivatives market, according to data from CoinGlass.
The heatmap for the liquidations in the cryptocurrency sector over the past day | Source: CoinGlass
Featured image from Dall-E, Santiment.net, chart from TradingView.com
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