XRP Shocking the Crypto World With a +87% Surge Over the Span of 3 Hours

For those who have been patiently awaiting an XRP price pump, your day has finally come.

Trading volume has hit a 10-month high today, and on-chain metrics are absolutely ballooning for the 5th ranked market cap asset. But the million dollar question is... why?

Well, it's quite straightforward. Regarding the longstanding lawsuit between the SEC and Ripple, it was declared in a court ruling that XRP should not be deemed a security in the US. This is an extremely exciting victory for the XRP community, and optimism is now sky-high thanks to the asset no longer having the cloud of worry over it.

With XRP not having the restrictions that securities have in the US, traders are much more likely to invest in it due to the financial benefits and added freedom they have in owning it. The ruling increases exposure, which is undoubtedly a bullish event. But does this mean that a reaction of this magnitude is justified?

Social dominance, which measures the percentage of discussions related to an asset compared to all top 100 market cap assets, indicates that XRP has shot up to 7.4% of ALL discussions. This is the highest level of discussion related to XRP since January, 2021. With such a high level of crowd recognition and FOMO, there will inevitably be a cooldown period. But once traders stop paying attention and move their focus somewhere else, there is a high likelihood that there will be a second pump wave.

Whale transactions on the XRP network have also hit their highest mark of 2023, and by a wide margin. Today, there have been 637 (and counting) transactions that have been valued at $100,000 or more. Clearly the pump is being fueled by these large transactions.

And it's important to look at the context of these transactions. If key whale and shark addresses are increasing their supply going into this pump, then it is a get foreshadowing signal that the pump may just be getting started, and it's a sign of good things to come. Our supply distribution metrics update every 24 hours, so we will see whether big whale traders increased their bags further when we update our community tomorrow.

However, we can clearly see that there has been a long-standing accumulation trend by these large key stakeholders that began back in early May. Since May 6th, 837.81M coins have been accumulated by addresses holding between 100k to 100m XRP tokens. In terms of the active traders on XRP (before moving into the higher tiers that are mainly exchange addresses), this group of wallets is essentially the one best to watch to understand how "smart money" is behaving. And they had been showing confidence in the asset for over two months now, even prior to today's court ruling.

And besides the impressive accumulation from sharks and whales, we can also see that trading volume has soared, as expected. With over 4.46B of volume today, this is the highest level of trading we have seen in over 10 months.

Lastly, let's check out the average trading returns showing on the XRP network right now. It's not a surprise that average trading returns are well into positive territory with such a historic short-term price pump.

Active 30-day addresses are up an average of +23.7%, while active 365-day addresses are up an average of 43.2%. Both of these numerous are concerningly high, but can easily normalize without XRP needing to give up all (or even half) of its gains today. Especially with many traders FOMOing in at the top, which is typical with a pump like this, all it may take is a mild retrace before MVRV percentages are closer to a healthy 0% again. A bigger retrace may even send average trading returns into the negatives if there are enough top buyers. And that would indicate that there is another buy signal coming up.

With any piece of major positive news like what we've seen with the XRP community today, take the initial reaction to it with a grain of salt. Just like traders overreacted to the initial news of the SEC lawsuit last year, it won't be surprising if this pump is a bit of an overreaction as well.

However, this news of XRP being labeled as a non-security is much more definitive news, so it is still undoubtedly a bullish outcome. But if you're planning to enter or add on to your position in XRP, just understand that there is almost always a cool-off period after an initial euphoric rise.

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Disclaimer: The opinions expressed in the post are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.