Ripple’s Transaction Volume Soars, But What Does It Mean for the XRP Price?

This week, Bitwise registered a trust called the “XRP ETF” in Delaware. The following day, the asset manager filed an S-1 form with the US Securities and Exchange Commission, a necessary step for companies seeking to launch a new security and list it on a public exchange.

As a result, the optimism surrounding a potential XRP ETF has led to a dramatic increase in transaction volume on the crypto asset’s chain.

Market Risks Amid Rising XRP Enthusiasm

The volume reached $2.39 billion, the highest level seen in eight months, according to the latest information from cryptoanalytical platform Santiment. This suggests increased trader activity and possible institutional accumulation.

The latest data reveals that XRP’s 30-day MVRV (which measures average trader returns over the past 30 days) has fallen to -9.2%, the lowest level in two months. Historically, this negative sentiment and poor returns can indicate an “opportunity zone” where the market is under stress, but downside risk is reduced. This is often a point where experienced investors begin to accumulate, hoping for a recovery as sentiment improves.

Bolstering the bullish outlook, 145 whale transactions were recorded on October 1st that exceeded $1 million, the highest in six months. This increase in whale activity suggests that larger investors are hoarding XRP or preparing for a strategic move. These large-scale transactions often herald changes in the market and can serve as a key signal for small traders looking for direction.

Social media sentiment around XRP has become very bullish, with the ratio of positive to negative comments reaching its highest point on October 1st, following the news of the ETF filing of Bitwise and before ETP.

Despite a notable shift towards bullish enthusiasm for XRP in the market, Santiment cautioned that markets often move against crowd sentiment, especially when enthusiasm is high.

“In terms of pricing, the initial hype boosted XRP’s value, but as seen in the past with Bitcoin and Ethereum ETFs, enthusiasm can be short-lived if prices close after initial announcements, SEC decisions on filings are delayed or implementation fails to meet investors’ expectations.”

Despite whale activity, increased trading volume and negative average returns suggesting a potentially bullish outlook, the expected rally will not occur until market optimism fades and traders experience frustration or impatience . Ironically, the price hike traders are hoping for may only materialize once crowd sentiment cools.

Ripple Prepares for SEC Appeal

The filing also comes at a delicate time for XRP and Ripple. On Wednesday, the SEC announced its intention to appeal a federal judge’s decision in the ongoing case against Ripple.

More than a year ago, the judge ruled that while the San Francisco-based blockchain company’s institutional sales of XRP violated federal securities laws, its programmatic sales to retail exchanges did not. The SEC’s attempt to file an interlocutory appeal against the summary judgment was denied by the judge.

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