XRP Price Could Test Negative Trend and Dip Below $0.47
Despite facing significant selling pressure, there are indicators suggesting that investor confidence in XRP remains intact.
XRP had a positive week, with its price increasing by more than 2%. However, a bearish pattern has emerged on the token’s chart, resulting in decreased volatility. The recent slow-moving price action could be a precursor to a downward price movement.
According to CoinMarketCap data, the momentum of XRP has slightly decreased, with the price experiencing minimal changes in the past 24 hours. As of now, XRP is the seventh-largest cryptocurrency, with a market capitalization of approximately $29.3 billion.
In the last 24 hours, the price of XRP has slightly decreased to $0.5227, but it has seen a 2.2% increase over the previous week.
In mid-April, XRP experienced a significant price decline, leading to the development of a bearish pennant pattern. The token’s price has since been consolidating within this pattern. If XRP tests this pattern, it could result in a rapid negative price action, potentially breaking below the lower trendline and pushing the price further south.
Santiment’s data indicates that there has been a spike in the inflow of XRP to exchanges, signifying strong selling pressure and investors dumping the asset. Additionally, the NVT ratio of XRP dramatically increased on May 24, suggesting that the coin may be overpriced. An overvalued asset often indicates an impending price decline. The MVRV ratio also recently fell, further adding to the pessimistic outlook.
Despite these concerning signs, there are some positive indicators. The weighted sentiment of XRP has risen, indicating that investors remain optimistic, while the market sentiment remains bullish. Coinglass data shows that the long/short ratio of XRP has increased in the past 12 hours, suggesting that investors are more inclined to buy the asset.
To determine whether XRP will turn bearish, let’s analyze its daily chart. After a decline, the Chaikin Money Flow (CMF) of XRP has increased, indicating a potential upward movement. Additionally, the Money Flow Index (MFI) is also moving upward, suggesting that prices may continue to rise.
If these signals hold true, XRP may choose to remain bullish and avoid testing the bearish pennant formation. Considering that strong liquidation at this level often triggers market corrections, XRP’s price could initially reach $0.544 if the bullish trend continues. On the other hand, if XRP tests the bearish trend, it may fall to $0.47 in the coming days.
In other news, Ripple Whale has transferred 50 million XRP to centralized exchanges following the passage of the FIT21 bill, as previously reported by CNF.
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