"Ripple (XRP) price faces correction after 30% rally, on-chain data suggests bearish outlook, with potential 10% drop to $0.560 support range
Ripple (XRP) price rallied 30% last week, reacting to the favorable conclusion to the SEC vs. Ripple lawsuit. While the upswing was impressive, it failed to produce a higher high that caused whale investors to offload their holdings. As a result of this on-chain movement, XRP value could face a major correction in the coming days.
XRP Price ready to slide lower
XRP price shot up 30% on August 7 and set up a swing high of $0.644, lower than the July 30 local top of $0.658. From a market structure standpoint, this lower high sends a message that the buyers could not propel the token higher, aka lack of demand. As a result, Ripple price has dropped 9% since the $0.644 swing high.
As XRP price exchanges hands at $0.585, investors can expect the 30% rally to come undone soon.
A start-of-the-week rally could push XRP, a remittance token, to retest the $0.613 resistance level. Rejection here would be a sign that buyers are exhausted. Such a signal would hint at a nearly 10% correction to the $0.560 to $0.555 support range.
On-chain Data Suggests Bearish Outlook for Ripple
While the technical perspective suggests a bearish outlook for XRP price, the on-chain data confirms it. Santiment’s Supply Distribution By Balance metric shows that wallets holding 1 million to 10 million XRP accumulated 230 million tokens from July 17 to August 2, anticipating a positive outcome of the SEC vs. Ripple lawsuit.
The same wallets started booking profits and offloading their tokens, and as of August 7, their balance reached a low of 3.8 billion after dumping 150 million XRP.
Additionally, the Whale Transaction Count indicator corroborates this movement, which tracks transfers worth $100,000 or more. This metric spiked on August 7, when the XRP price shot up 30%, indicating that these whales were selling.
The technical and on-chain data hint that institutional investors sold their holdings after the conclusion of the SEC vs. Ripple lawsuit. While a short-term correction is likely, it could be undone if Bitcoin price continues to move higher.
Such a development could interest buyers and propel the XRP price above the $0.613 critical resistance level. Flipping this barrier into a support floor could attract bullish momentum and potentially propel XRP to $0.655m, the next key hurdle.
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