XRP price stagnated around the $0.52 area for the better part of the last 7 trading days. A deep dive into on-chain fundamental metrics shows that XRP may soon lose the $0.50 support. How much downside can Ripple investors expect?
XRP’s recent rally has been driven by positive market sentiment and accumulation frenzy among crypto whales. But, just two weeks after hitting an 11-month high of $0.57, the on-chain data suggests that the bears may be back in control soon.
The growth of the XRP network is in free fall
Despite the recent price rally, XRP has struggled to attract fresh demand in the past week. According to data compiled by Santiment, the number of new addresses created on the XRP network has dropped significantly since the last local spike in late March.
Between March 29 and April 17, the number of new subscribers to the network decreased by 70%, from 3,360 to 995.
Network growth measures the rate at which new participants join a particular blockchain ecosystem. When it is continually falling while prices are rising, it indicates an imminent price correction, as the base currency may struggle to find new demand.
Likewise, in further validation of the bearish outlook, it appears that a large group of whales has begun to take profits over the past week. According to Santiment.
The chart below shows that the XRP whale group sold 370 million coins between April 12th and April 17th.
At the current market price of $0.50, the coins sold are worth approximately $185 million. And when cryptocurrency whales start selling huge amounts within a short period, it can spread bearish sentiment to other existing and potential investors.
In short, given the declining growth of the network, if whales continue to flood the market with more than 4.19 billion of their coin holdings, it is only a matter of time before the price of XRP falls further.
XRP Price Prediction: A drop to $0.48 is likely
The XRP bulls have been fiercely defending the $0.50 support level, but Santiment’s Market Cap to Realized Value (MVRV) data suggests that it could soon be breached.
As it stands, most of the XRP holders in the last 30 days have been making a profit of around 4%. The chart below shows that they are likely to continue selling until the price reaches $0.49, around the 1% loss area.
If the level also provides support when XRP could drop further towards the 6% loss range at $0.45. Here, however, the bulls can be forced to bounce back once equity holders cut their losses.
However, the bulls could invalidate the bearish stance of the XRP price which could rise above $0.55. However, many stockholders can look forward to taking profits around the 8% region and inadvertently ending the rally.
But if XRP breaks this resistance, it could reach a one-year high of $0.60.
In line with Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate and unbiased reporting, but market conditions are subject to change without notice. Always do your own research and consult with a professional before making any financial decisions.