According to the article, the price of XRP is currently facing the risk of a significant drop due to many negative factors from the market and investor behavior. Below is a detailed analysis of 5 important signals:
1. A decline in transaction volume on the XRP network
• The number of daily addresses interacting with XRP has sharply decreased, indicating waning interest from investors.
• A decrease in transaction volume could erase important support levels and facilitate a deeper price drop.
2. Selling activity from 'whales'
• Large investors, who usually control most of the XRP supply, have been continuously selling over the past month.
• This action raises concerns as it often occurs before significant price drops, especially when retail investors are also reducing their participation.
3. Profit-taking pressure from a high MVRV ratio
• The MVRV (Market Value to Realized Value) ratio indicates that many investors are holding unrealized profits.
• When MVRV is high, the risk of investors taking profits increases, pushing the price of XRP down to a nearby support level of $1.
4. Bearish trend in technical analysis
• XRP is forming a descending triangle pattern, often considered a strong bearish signal in technical analysis.
• If this pattern breaks, the price could drop by up to 31%, bringing XRP below the $1 level.
5. Weakening of network activity
• XRP's network activity has fallen to historic lows, eroding investor confidence.
• As interest wanes, selling pressure may increase, causing the price to continue to drop.
In summary
The above factors combine to create a negative short-term outlook for XRP. A price drop below $1 is possible if there is no positive change in price action, market sentiment, or other fundamental factors. Investors need to closely monitor strong support signals to make timely decisions.