Ripple (XRP) price rebounded by 4% on May 11 after falling 12% in the previous seven days. On-chain data shows that intense trading activity by XRP whale investors could be behind the recent rally. Is it an indication of a more bullish XRP price expectation?
Along with other massive cryptocurrencies, the price of XRP has taken a huge hit in the past week. But the intense whale activity and the less-than-sold position of the native currency of the book, XRP backed by Ripple, provides a great opportunity for strategic investors.
This is why it can be an indicator of a bullish XRP price prediction.
Whales place big bets
XRP whales have intensified their trading activity over the past seven trading days. The chart below shows how daily transactions over $1 million increased from 15 to 45 between May 6 and May 12.
The Whale Transaction Count is a financial metric that tracks the number of large transactions made per day. When it increases, it indicates that whale investors are increasing their bets on the underlying asset.
XRP is currently undervalued
In further confirmation of the bullish XRP price prediction, on-chain data indicates that the recent price downtrend has been largely due to macro factors and speculation.
The Network Value to Transaction Volume (NVT) depicts that there has been no deterioration in the underlying metrics of the XRP ledger network.
As shown below, the XRP NVT decreased by 79% from 383.53 to 78.43 between April 29 and May 12.
The NVT ratio is often used by strategic investors to assess the relationship between the market capitalization of a cryptocurrency network and the level of underlying transaction activity.
When the NVT drops significantly, as noted above, the asset is undervalued and may be due to a bullish price reversal.
In short, the increased whale activity and lower NVT ratio could attract investors looking to enter the market at a critical positive turning point.
XRP Price Prediction: Bulls are looking to reclaim $0.50
Notably, most of the cryptocurrency investors who bought XRP over the past month are seeing unrealized losses of around 6%. Historical data indicates that selling is unlikely until the price rally, until the price reaches the $0.45 level.
And if XRP can breach the $0.45 resistance, it could rally another 7% towards the $0.50 area before the bears start gathering again.
Conversely, the bears could still turn the narrative around if the price of XRP drops below $0.40. However, investors are likely to offer bullish support at this level as they look to keep their losses below 10%.
Otherwise, XRP could drop further towards $0.35, which is the next important support level.
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