Ripple Price Analysis: XRP Price Remains Sluggish as On-Chain Metrics Reset; What Comes Next?

Last Updated July 23rd 2021
2 Min Read
  • The profit or loss ratio slides toward zero, sending Ripple back into the buy zone.
  • A recovering network indicates that speculation for gains above $2 is rising momentarily.
  • Closing the day under $1.6 could lead to an increase in selling pressure.
  • Ripple is struggling to hold above $1.6 after overhead pressure soared at $1.7. A descending trendline from the multi-year high seems to be adding weight to the bearish pressure. Support has been established at $1.5, thus keeping bears from pushing for a breakdown toward $1.

    Ripple's technical picture indecisive

    The Moving Average Convergence Divergence (MACD) currently levels within the positive region, thus supporting a consolidation period. A movement toward the mean line (0.00) would trigger losses. On the other hand, MACD line (blue) cross above the signal line would call more buyers into the market, initiating the uptrend toward $2.

    XRP/USD four-hour chart

     Ripple XRP 4-Hour Chart

    According to Santiment, a popular on-chain analysis platform, Ripple's profit ratio has significantly decreased. The market value realized value (MVRV) measures the average profit or loss of the holders of XRP tokens moved over the previous 30 days based on the price when each of the tokens last moved.

    Ripple MVRV model

     Ripple XRP MVRV Model

    At the time of writing, the MVRV ratio stands at 6.9%, following a 30-day high of approximately 117%. A low MVRV ratio shows that holders are at a loss or are yet to break even. This is usually a bullish signal because investors are less likely to sell and prefer to hold until the price recovers. On the other hand, a high ratio means that most holders are at a profit hence the tendency to sell, resulting in an uptick in overhead pressure.

    Ripple's recovery is currently in the cards based on improving network growth. The number of unique addresses had bottomed out at roughly 5,050 on May 2. However, at the time of writing, the newly-created addresses joining the network have risen to 7,800.

    As the network gains traction, adoption also increases. Note that network activity depends on the addresses interacting on the protocol, impacting speculation for higher price levels.

    Ripple network growth chart

     Ripple XRP Network Growth

    Looking at the other side of the fence

    Ripple is currently pivotal at $1.6, but a daily close under this level of the descending trend line could lead to a downswing. As discussed, the MACD may also flip bearish, hence add to the downward pull. Support at $1.5 and the 50 Simple Moving Average (SMA) is in line to prevent losses from extending further. However, if push comes to shove, we can expect XRP to seek support at the 100 SMA near $1.1 and $0.85, respectively.

Top Brokers in
    All Regulated Brokers
    67% of retail clients lose money when trading CFDs with this provider.