The XRP price saw a sharp upward impulse on Tuesday, April 7, due to somewhat de-escalating tensions between the United States and Iran. This price momentum follows several weeks of non-stimulatory price movements and reflects the uncertain state of the overall market.
During those moments of relative lull on the charts, user activity seemed to drop along with prices. Data from a recent on-chain analysis revealed a significant decline in XRP trading activity on Binance, the world’s largest exchange by trading volume.
Weak volume indicates cooling market momentum
In a Quicktake post on the CryptoQuant platform, on-chain analyst Arab Chain shared data showing a significant loss of trading activity for XRP on Binance. The relevant indicator here is the XRP Volume Z-Score (30d) statistic, which measures the extent to which trading volume deviates from the 30-day average.
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Arab Chain explained that when the numbers of this metric turn negative, it indicates that current trading volume is below the historical average, indicating reduced activity and less available liquidity. In the Quicktake post, the analyst highlighted that the index recently fell below -1, one of the lowest levels since 2025.
As explained earlier, this reading indicates a remarkably low volume of trading activity on the exchange. Interestingly, this drop has coincided with a continued decline in the XRP price, indicating that the lack of strong participation is weighing on price action as fewer and fewer buyers step in to support the market.
According to the crypto expert, a drop in trading volume usually coincides with a period of market anticipation, when investors prefer to wait for clearer signals before taking new positions. Furthermore, a declining Z-Score is often a telltale sign of declining investor participation, especially among short-term holders (who are more attracted to momentum and trading volume).
The analyst added that periods of low trading volume are usually accompanied by consolidation phases. During such times, the market would move sideways or slowly drift in a certain direction as both buyers and sellers remain cautious – a phase that actually precedes strong directional momentum.
The market expert also raised the possibility that the recorded decline in trading volume could reflect reduced market volatility, characterized by weak price action due to reduced volume of large market orders. “This pattern often occurs after periods of high activity, as the market tends to enter a rebalancing phase,” Arab Chain explains.
The question now is whether this phase of low activity will revive momentum or exacerbate downside risk. If trading volume starts to recover, it could be a sign of growing confidence and the potential for stronger price action; However, continued weakness in participation could leave the market stuck in a period of uncertainty.
XRP price at a glance
At the time of writing, XRP is valued at around $1.35, reflecting a paltry 0.7% jump from the daily time frame.
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Featured image from iStock, chart from TradingView