- XRP has continued to trade below its 20-day exponential moving average.
This suggests a decline in buying pressure.
As a researcher with experience in cryptocurrency analysis, I believe that XRP‘s persistent trading below its 20-day exponential moving average and key technical indicators pointing towards declining demand suggest that the altcoin might continue its seven-day price decline. The decline in active addresses on-chain and new addresses created to trade XRP further supports this bearish outlook.
The seven-day downtrend of Ripple (XRP) could continue, as it ended beneath its 20-day moving average (MA) for the fourth time in a row on May 31st.
When the price of an asset falls below its 20-day moving average, this is considered a bearish sign. It implies that the current value is now lower than the average price over the past 20 days. This observation alerts traders that the market trend might be shifting towards selling, as other market participants may be following suit and selling their holdings as well.
The demand for XRP loses steam
According to AMBCrypto’s analysis, certain important technical signals for XRP suggested a potential decrease in value in the near future. Specifically, its momentum indicators were positioned beneath their neutral thresholds as of the time the assessment was made.
XRP’s Relative Strength Index (RSI) was 46.64, while its Money Flow Index (MFI) was 40.96.
Based on these figures, it appears that the demand for XRP has been decreasing as investors have chosen to redistribute their existing supplies instead of acquiring fresh tokens.
The uptick in XRP’s selling pressure was confirmed by its declining active addresses on-chain.
According to Santiment’s analysis, there has been a significant decrease of over 30% in the number of daily active XRP addresses, as measured by the 30-day moving average, within the past month.
In a comparable fashion, the number of new addresses used for trading the altcoin on a daily basis decreased by 29% over the same timeframe.
Notably, the decline in an asset’s active and new addresses often foreshadows a fall in its price.
Now might be the time
It’s quite intriguing that even though the interest in the altcoin has waned and its value has dropped, active traders are still managing to make a profit every day.
The 30-day moving average of XRP‘s daily transaction volume profits versus losses came out to be 1.16. In simpler terms, the average ratio of XRP’s transaction volume profit to loss over the past 30 days was 1.16.
As a researcher examining XRP traders’ transactions during the specified timeframe, I discovered an intriguing pattern: For each trade resulting in a loss, approximately 1.16 profitable trades occurred on average.
Traders seeking to go against the market trend may consider purchasing XRP now, as indicated by its unfavorable Market Value to Realized Value (MVRV) ratio, which has signaled a buy opportunity.
According to Santiment’s analysis, the MVRV ratios for XRP, calculated using 30-day and 365-day moving averages, stood at a negative 0.7% and negative 8.5%, respectively, at the point of this writing.
As a crypto investor, I often look at the ratio of an asset’s current market price to the weighted average cost basis of my holdings in that particular asset. This metric helps me gauge my profitability and evaluate potential gains or losses from my initial investments.
Realistic or not, here’s XRP’s market cap in BTC’s terms
If the asset’s value is as low as this, it implies that the market is underestimating the asset’s worth. In other words, the current market price falls short of the average cost at which all its tokens have been bought.
The asset is currently available for purchase at a lower price than its past value, providing a promising buying chance.
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2024-06-01 13:11