Will XRP fall back to $0.56? Taking a look at the altcoin

XRP

As an experienced analyst, I believe the oversold condition of XRP‘s token, indicated by a low RSI reading, presents a potential buying opportunity. The price-DAA divergence further supports this view, as the decrease in active addresses has been more pronounced than the decline in price. These technical indicators suggest that XRP might be on its way to $0.56 without depending too heavily on Bitcoin’s movement. However, it is essential to keep in mind that no single indicator can guarantee future price direction and should always consider other factors when making investment decisions.

As a researcher studying the cryptocurrency market, I observed that XRP, the native token of the XRP Ledger, exhibited oversold conditions on the 12th of May based on the Relative Strength Index (RSI) calculations on the 4-hour chart.

The Relative Strength Index (RSI) is a technical tool used to determine the strength of a cryptocurrency’s price action. A reading of 70 or more indicates that the token may be overbought, suggesting potential for a bearish trend.

The door is open for buyers

However, when the RSI is at 30 or below, it means the asset is oversold.

Based on the given information, the indicator dropped to 30.09 just prior to the reported reading of 35.65, implying a potential rebound may have started.

Previously, XRP experienced a similar market condition, resulting in a significant price surge. Approximately a few days afterward, the token’s worth peaked at $0.56 before undergoing another decline.

If the pattern repeats itself, it’s possible that XRP‘s price may rise towards the previously mentioned figure.

Will XRP fall back to $0.56? Taking a look at the altcoin

As an analyst, I recognize that while momentum can provide valuable insights into market trends, it does not single-handedly dictate future price directions. Therefore, I chose to explore other on-chain metrics in my analysis provided by AMBCrypto. The first metric I delved into was the price-Daily Active Addresses (DAA) divergence.

The term “DAA” stands for Daily Active Addresses, which measures the amount of user engagement on the network. By analyzing the price trend in relation to DAA, traders can identify potential buying and selling opportunities.

For those unfamiliar with it, this metric is particularly beneficial. Here’s why: As prices rise, XRP becomes more appealing to potential buyers. Consequently, heightened buying activity ensues, resulting in a surge of network usage.

As a researcher studying the behavior of cryptocurrency markets, I’ve observed that in the majority of instances, prices reach a peak at the point when a significant number of sellers enter the market. Conversely, an unexpected surge in the number of active addresses could potentially lead to an uptick in the token’s price.

XRP does not need BTC this time

As a crypto investor, I would interpret this as follows: When the cryptocurrency’s price increases at a faster rate than its daily averaged price (DAA), it could be an indicator for me to consider purchasing more of that particular asset. Conversely, if the price experiences a larger decline compared to the DAA, then it may be time for me to consider selling my holdings as this could potentially signal a downward trend in the market.

At present, the cryptocurrency’s price-to-daily active users (DAA) ratio stands at a decrease of 58.28%. This signifies that there has been relatively low engagement on the XRP Ledger.

As a crypto investor, I’ve noticed that XRP has experienced a setback, with its value dropping by 14.66% over the past month. However, what’s even more concerning is the significant decrease in active addresses associated with this digital asset during the same timeframe.

Will XRP fall back to $0.56? Taking a look at the altcoin

Purchasing XRP for $0.50 could potentially be a wise choice. Furthermore, there’s a possibility that $0.56 may serve as a temporary price objective. However, this may not strictly hinge on the fluctuations of Bitcoin (BTC).

At present, the correlation between Bitcoin (BTC) and Ripple (XRP) is 0.56. The correlation coefficient can range from -1 to 1, with -1 signifying opposite trends and 1 indicating identical trends.

Realistic or not, here’s XRP’s market cap in BTC terms

Therefore, XRP’s correlation with the number one cryptocurrency per market cap was weak.

If the cost of Bitcoin doesn’t increase, it won’t necessarily prevent XRP from advancing towards $0.56. However, investors should be cautious and not solely depend on these signals.

2024-05-13 10:15

The door is open for buyers

XRP does not need BTC this time

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