Ripple (XRP) has been trading within a tight range around $0.530 for the past four days, signaling a period of market indecision. However, this stabilization follows a concerning breakdown below its ascending trendline last week, raising red flags for traders and investors alike. With recent on-chain data indicating bearish trends, the outlook for XRP appears increasingly pessimistic.
On October 2, XRP broke below its ascending trendline, a significant support level that had been in place since early July. This shift marks a potential change in market structure from bullish to bearish. The price faced rejection from its daily resistance level at $0.544 on Monday, further solidifying the negative sentiment. Currently, XRP is trading at approximately $0.528, below this crucial support level.
The critical 200-day Exponential Moving Average (EMA) at $0.554 has become a key resistance level following XRP’s recent decline. This EMA aligns closely with the broken ascending trendline, adding to its significance. If XRP fails to reclaim this level, a further decline of around 18% could be on the horizon, potentially testing the August 5 low of $0.431.
The Moving Average Convergence Divergence (MACD) on the daily chart also reflects bearish momentum. A crossover on October 2 generated a sell signal, with red histograms appearing below the neutral level. This pattern indicates that sellers currently dominate the market, contributing to a lack of upward price movement.
One of the most telling indicators of market sentiment is the Network Realized Profit/Loss (NPL) metric. This indicator provides insight into the average return on investment (ROI) based on on-chain transaction volumes. Recent data shows a substantial spike in XRP’s NPL, soaring from 13.24 million to 146.09 million between September 30 and October 1. This increase indicates that holders are realizing profits and contributing to a rise in selling pressure, a signal often associated with panic sell-offs.
Accompanying this bearish outlook is a notable decrease in XRP’s daily trading volume. From October 2 to Sunday, the volume plummeted from $3.13 billion to just $704.78 million, the lowest level observed since early September. This decline signifies reduced trader interest and liquidity, further exacerbating the bearish sentiment surrounding XRP.
The current price action of Ripple (XRP) suggests a looming bearish trend as it struggles to regain critical support levels and faces mounting selling pressure from holders. The combination of technical indicators pointing toward further declines, alongside on-chain data reflecting market anxiety, paints a concerning picture for XRP’s near-term prospects. As traders navigate this uncertain landscape, the focus will be on whether XRP can reclaim its critical resistance levels or if it will continue to trend downward in the coming days.
October 2024, Cryptoniteuae