XRP Faces Uncertainty Amid Weak Network Activity
Key Takeaways
- XRP continues to move within a descending wedge – a technical pattern that suggests an imminent directional decision.
- On-chain data indicates declining speculative activity and a potential consolidation phase.
- Three main risks: weak network activity, failed breakout attempts, and declining short-term token movements.
Technical Outlook: XRP Trapped in a Narrow Wedge
XRP is currently trading at around $2.35 USD. Over the past few days, the price has repeatedly failed to break through the resistance zone around $2.50 USD. At the same time, a descending wedge is forming on the weekly chart – a pattern that typically signals an upcoming price movement, either upward or downward.
Support is currently around $2.12 USD, with another key level at $1.61 USD. The Stochastic RSI – an indicator for short-term price movements – is at 28.38, showing a slight recovery from oversold territory. This suggests a possible stabilization, but a clear breakout has yet to occur.
On-Chain Data: Fewer Profit-Takings, But Also Less Usage
A key metric for evaluating cryptocurrencies is the MVRV Z-Score, which measures the ratio between market value and realized value. For XRP, this value currently stands at 2.57 – significantly below the peak levels seen earlier this year. This means unrealized profits have decreased, reducing the likelihood of widespread profit-taking.
At the same time, the NVT Ratio (Network Value to Transactions) has risen to 838, indicating a growing gap between market capitalization and actual usage. This suggests that the network’s valuation is increasing faster than its transaction activity – a warning sign when it comes to the fundamental support for the price.
Liquidations Indicate Failed Breakout Attempts
On May 17, long positions worth $6.83 million USD were liquidated, while short positions amounted to only $481,000 USD. This distribution shows that many traders were betting on rising prices but were caught off guard by a sudden drop – a classic sign of a failed rally.
Another indicator, the 1d–7d Realized Cap HODL Wave, has dropped to 0.96. This measures the activity of short-term holders. A low value means fewer short-term movements are taking place – an indication of waning speculation and increasing holding behaviour.
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Three Risks to Keep an Eye On
- Fundamental Weakness: The high NVT Ratio shows that network activity is not keeping pace with price growth. This could put pressure on the price in the medium term.
- Technical Uncertainty: XRP is in a narrow wedge. Without a rise in volume or external catalysts, it remains unclear whether a breakout will succeed.
- Market Behaviour: The high number of long liquidations indicates that traders were overly optimistic. Such setbacks can temporarily weaken confidence.
Our Assessment
XRP is in a phase of uncertainty. The technical patterns suggest an upcoming directional decision, but clear signals are lacking. While some on-chain data points to stabilization, others raise questions about the sustainability of the current price level.
For you as a trader or investor, this means: closely monitor price developments, especially around resistance and support zones. Watch for increases in volume and changes in transaction data – they could provide clues about the next major move. For now, patience is key.
Sources
- Santiment
- CoinGlass
- TradingView
| Symbol | XRP |
| Coin type | Alt Coin |
| Transaction Speed | High |
| Pros |
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| Cons |
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| Further practical applications | |
| Price | 2.4 |
| 24h % | 1.25 % |
| 7d % | 1.66 % |
| 30d % | 15.84 % |
| 60d % | 4.64 % |
| 1y % | 357.83 % |
| Official Links | Website |
| Socials | X |
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