Rocket Pool (RPL) closed the past month with a sharp price drop of 20% after hitting a new 2023 peak of $61 on April 17. A critical analysis of the on-chain data indicates that bearish actions by investors exacerbated the price decline. But where will the RPL price bottom out?
Rocket Pool (RPL) is a unique ETH2 staking protocol that allows users to join a decentralized node operator’s network or run their own nodes with just 16 ETH. After the successful competition for the Shapella Upgrade, RPL has raced to a new peak in 2023 with a value of $61.
But declining interest from investors in cryptocurrencies and an industry-wide downturn in the altcoin markets has led to Rocket Pool taking a bearish view in recent weeks.
The drag of the missile pool network is declining
On-chain data depicts investors walking away from Rocket Pool about a week after Shabella’s upgrade. The chart below shows how the growth of the RPL network started to decline around April 17th. He hasn’t recovered since.
Between April 17th and May 2nd, Rocket Pool recorded an 86% decrease in network growth. The red line in the graph below shows how network attraction decreased from 316 to 45 new addresses created on May 2nd.
Network growth measures new participants joining the blockchain network by evaluating the number of new wallet addresses generated per day.
The sharp decline, as noted above, indicates that the Rocket Pool ecosystem could lose traction and market share to alternative protocols. Hence, the native RPL token may struggle to find new demand to push it from the current bearish pullback.
Active users are turning away
The recent decline in the number of daily active users (DAU) on the Rocket Pool network confirms the bearish outlook. The chart below shows how the DAU fell from 799 on April 18th to 195 addresses at the close of May 1st.
DAU measures the daily number of unique wallet addresses that interact on the blockchain network. Notably, when there is a bearish convergence between the price and the DAU, this indicates that tough times await the major currencies.
As it stands, unless the Rocket Pool team can reignite the interest of investors and network participants, the RPL price outlook could remain bearish.
RPL Price Prediction: Will RPL Drop Below $40?
Global income/loss price data from IntoTheBlock (GIOM) shows that RPL is likely to drop below $40. But the bears will have to fight the initial support line around $43. Around this price level, it will look for 47 addresses that bought 2,900 tokens to prevent a drop. However, this is a small support group in a bear market.
If the bears remain in control as expected, the RPL price could drop towards $35, where there is more support than 483 addresses containing 15 million tokens.
However, the bulls can invalidate the bearish position if the RPL price can rise beyond $50. But fierce resistance from 218 addresses containing 38,000 addresses can be a roadblock.
Although unlikely, if the bulls can extend the $50 resistance, bears can expect a full push towards the $60 region again.
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.