The Z-score data for XRP’s 30-day average trading volume on Binance crypto exchange signals an impending large move for the cryptocurrency. XRP’s volume Z-score stability indicates that while the market is currently in calm mode, a big move is brewing under the surface.
XRP currently experiencing consolidation
According to a CryptoQuant post by analyst Arab Chain, some hints can be gathered about XRP’s liquidity and momentum based on the digital asset’s Z-score 30-day average data for trading volume on the Binance crypto exchange.
At the time of writing, XRP trades at $1.36, about 2.3% down in the past 24 hours. The 24-hour trading volume is close to $2.4 billion, down from $3 billion on February 12.
Notably, the cryptocurrency’s Z-score is currently hovering around zero, meaning that it is right now trading close to its historical average over the past 30 days, showing no signs of any major upward or downward deviation.
To explain, the Z-score of an asset measures how far its current trading volume is – expressed in standard deviations – from its historical average over the past 30 days. A Z-score closer to zero indicates normal trading volume, while high positive or negative values signal unusually strong selling or buying power.
In simple words, a Z-score close to zero shows that there is a balance between buyers and sellers, indicating the market is experiencing a period of calm following earlier volatility. The analyst stated that such market behavior is typically observed during consolidation phases.
Z-score shows signs of big move
The following chart shows that historically, sharp spikes in Z-scores have preceded significant price moves in XRP, both upward and downward. In contrast, when the Z-score stabilizes close to zero, there is a strong directional movement once the consolidation is complete.
To conclude, the current reading of XRP’s Z-score can be interpreted as a sign that the market is in a holding pattern. Although the likelihood of an immediate explosive move is relatively low, there is a high possibility of a new wave forming if there’s a sudden surge in trading volume.
If the Z-score surges above +2, it could be an early indication of renewed momentum for XRP. On the contrary, a decline in Z-score in the negative territory could mean the start of a correction move.
