According to Kaiko data, the realized volatility of XRP reached 100% in March. Solana (SOL) and Cardano (ADA) also showed high turbulence.
Cryptocurrency Volatility Increase
The realized volatility of the Ripple-linked XRP token surpassed 100% this March. The same was observed with the Solana (SOL) token, which also went through an extremely turbulent week. Meanwhile, the volatility of the Cardano (ADA) token soared to a record 120%.
Impact of Reserve Inclusion
The massive volatility was driven by the developments surrounding the much-discussed cryptocurrency reserve. On March 2, the XRP price skyrocketed 34% after the token was mentioned among those to be included in the reserve, but then collapsed by nearly 19%. It was confirmed that the altcoins would be part of the so-called 'stockpile,' which would exist separately from a Bitcoin-only reserve.
Market Reaction
Following clarifications that the tokens were mentioned based on their market cap rather than being hand-picked by the government, ADA and XRP experienced further losses. On Monday, leading altcoins underwent another brutal correction along with Bitcoin and tech stocks. For instance, XRP is now down 14% since the reserve announcement. The token is now flat on a year-to-date basis after peaking at a new all-time high of $3.40 in January.
Cryptocurrency volatility remains high, especially amid news about reserves. Investors should be prepared for sharp price fluctuations in the market.
