Ripple's XRP rose to a three-year high of $1.26 on November 16 but has since dropped to $1.15, reflecting a 9% decrease over the past two days.
The market is currently under increasing selling pressure, raising concerns that the XRP token may soon drop below the important $1 threshold.
Ripple sees an increase in sales activity
The divergence between XRP's price and its trading volume over the past 24 hours is a noteworthy indicator of increasing selling pressure. The value of the altcoin has increased by 7% during this period, while its trading volume has plummeted by 55%.
When the price of an asset rises while trading volume decreases, it signals that market participation is weakening. Sustained price increases are more robust when accompanied by higher trading volumes, indicating greater market interest.
However, when the price rises with decreasing volume, the upward momentum is losing steam. This indicates that fewer participants are driving the price movement, potentially making it less reliable or more susceptible to reversal.
XRP price and trading volume. Source: Santiment
Additionally, a heatmap of the Relative Strength Index (RSI) of XRP shows overbought conditions in four out of six time frames, suggesting that the price may continue to decline in the meantime.
RSI measures the overbought and oversold market conditions of an asset. It ranges from 0 to 100, with values above 70 indicating that the asset is overbought and likely to decline. Conversely, an RSI value below 30 suggests that the asset is oversold and may see a rebound.
The overbought conditions of XRP across multiple time frames indicate a clear conclusion: the market is overheated. Signs of buyer exhaustion are appearing, increasing the likelihood of a continued decline in the XRP cryptocurrency price.
XRP RSI heatmap. Source: Coinglass
XRP price prediction: A price below $1 is imminent
Currently, XRP is trading at $1.15, maintaining support at $1.06. If selling pressure escalates, the altcoin may test this support level. A breach could push the price below the psychological threshold of $1, potentially reaching $0.93. Continued selling could push XRP even lower, possibly targeting $0.82.
XRP price analysis. Source: TradingView
However, a revival in demand could push XRP back above the three-year high of $1.26, invalidating the bearish outlook mentioned above.