Ripple Price Forecast: XRP Downward Pull intensifies Toward $0.5 amid Weakening On-chain Metrics

Last Updated July 23rd 2021
2 Min Read
  • Ripple drops by more than 11% in 24 hours and revisits levels under $0.6.
    • The number of new addresses joining the network drops, further jeopardizing recovery.
    • The TD Sequential indicator flashes a key buy signal, hinting at a potential recovery.

    Ripple has continued to explore the rabbit hole as downward forces intensify by the day. Initially, losing support at $1 was detrimental to the uptrend to $2, but losses under $0.8 proved worse, while XRP dived to $0.56.

    At the time of writing, the cross-border money transfer token trades marginally above $0.6 amid the push by bulls for a sustained recovery. If this support remains in line, buyers are supposed to start battling for gains above $0.7.

    Why Ripple’s recovery will be challenging

    Seller congestion at $0.65 limits XRP’s immediate upside. This zone stopped the crash in May but put up a weak fight on Monday, allowing losses to extend to $0.56. On the downside, support at $0.62 is not guaranteed, especially with previous predictions suggesting that Ripple may drop to $0.5 before a formidable recovery comes into play.

    XRP/USD 12-hour chart

     XRP/USD 12-hour chart 062221

    Subsequently, Santiment brings to light a dwindling network growth pattern witnessed on a three-month trailing average. The network growth on-chain model tracks the number of newly created addresses on the XRP Ledger.

    A constant drop in the metric is a bearish signal that leads to more price drops or delays in recovery. Note that around 1,680 addresses joined the protocol on June 21 compared to a three-month high of nearly 123,400.

    As the number of addresses joining the protocol drops, the project’s mainstream adoption suffers, affecting the token’s value. Note that a falling network growth also impacts the network activity and reduces speculation on the network, thus hindering price growth.

    Ripple network growth model

     XRP/USD santiment chart 062221

    The dwindling network growth reflects a drop in Ripple’s network activity. According to Santiment, the Active Addresses metric “shows the number of unique addresses involved in XRP transactions daily. This metric indicates the daily level of crowd interaction (or speculation) with a token.” A consistent fall usually harms the crypto asset, leading to significant long-term losses, as observed on the chart.

    Ripple Active Addresses metric

     XRP/USD santiment chart 2 062221

    Looking at the other side of the fence

    The TD Sequential indicator has recently flashed a buy signal on the 12-hour chart. This call to sell manifested in a red nine candlestick. When this signal appears on a chart, investors are encouraged to increase their positions ahead of a potentially massive upswing.

    XRP/USD 12-hour chart

     XRP/USD 12-hour chart 2 062221

    As long as short-term support at $0.6 holds in the near term, losses to $0.5 will be invalidated in favor of a recovery mission above $0.7. If the buy signal is confirmed, XRP’s uptrend will begin to form as investors look forward to gains beyond $1.