Crypto investors are closely watching Ripple (XRP) as technical indicators paint a worrying picture for the altcoin's price. After closing below its 20-day exponential moving average (EMA) for four consecutive days, XRP has entered what many analysts interpret as a bearish zone.
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This technical indicator suggests a potential change in market sentiment, with the average price of XRP over the past 20 days acting as a resistance level. With current prices below this key benchmark, analysts fear a drop in demand is imminent.
At the time of writing, XRP was trading at $0.52, down 0.3% and 3.1% over the past 24 hours and seven days, respectively, Coingecko data shows.
Demand for XRP loses steam
Fueling the bearish fire are XRP momentum indicators, which provide insight into the strength and direction of price movements. The Relative Strength Index (RSI) and the Money Flow Index (MFI) are currently positioned below their neutral points. This suggests that buying pressure behind XRP is easing, with investors potentially looking to dump their holdings rather than accumulate more.
The significant drop in active on-chain addresses of XRP further dampened the mood. According to data from Santiment, the number of daily active addresses on the XRP network increased by 30% over the past month. This drop is often seen as a harbinger of a price drop, as it indicates a decrease in overall network activity and user engagement.
Enjoying the gloom?
However, there are some glimmers of hope for XRP bulls. An interesting data point reveals that daily traders still manage to make profits. An analysis of XRP's daily trading volume in terms of profits versus losses shows that for every trade ending in a loss, 1.16 trades generate profits. This suggests that despite the overall bearish sentiment, short-term trading opportunities could exist for qualified investors who can capitalize on market volatility.
The MVRV ratio offers a different perspective
Another factor that could attract some investors is the negative market value to realized value ratio (MVRV) for XRP. This metric essentially compares the current market price of XRP with the average price at which all XRP tokens were acquired.
A negative MVRV ratio suggests that XRP is currently undervalued, potentially presenting a buying opportunity for investors looking for assets trading below their historical prices.
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XRP Price Prediction
Meanwhile, the current XRP price prediction indicates a 20% rise to $0.626627 by July 1, 2024, despite a 20% rise. bearish market sentiment reflected by technical indicators. The Fear & Greed Index, at 72, shows strong investor greed, suggesting strong buying behavior, but also a risk of overbought conditions and potential price corrections if sentiment changes.