XRP Price Struggles Bearish On-Chain Cues—Is a 36% Crash Inevitable?
PATNA (CoinChapter.com) — XRP price struggled to maintain momentum, trading at $0.525 after a sharp drop from its recent highs of over $0.60. The decline coincides with the U.S. SEC’s decision to file an appeal against Ripple, aiming to overturn the ruling that XRP’s secondary sales do not constitute securities.
Legal uncertainty has weighed on market sentiment, with XRP failing to stage a strong recovery amidst investor concerns. Ripple’s leadership remains confident, but the ongoing appeal casts a bearish shadow over XRP’s near-term price outlook.
On-Chain Metrics Show Bearish Overtones
XRP’s recent price movements and on-chain data reveal a predominantly bearish sentiment. The token’s price dropped from its September high of over $0.66 to around $0.525. This decline aligns with increasing profit-taking activity, as evidenced by spikes in realized losses.
XRP Network realized profit/loss. Source: Santiment
These losses suggest that many participants are exiting positions at a loss, indicating a lack of confidence in short-term price recovery.
Furthermore, the MVRV (Z-score) metric, currently in negative territory (-0.592), supports the bearish outlook.
XRP MVRV-z score.
A negative MVRV typically signals that the asset is undervalued, but it also implies that most holders are underwater, which may suppress any strong buying momentum for the time being.
Whale activity also provides cause for concern. Large holders (100 million to 1 billion XRP) have reduced their holdings significantly since June, a signal often associated with looming downtrends.
Whale tiers between 10 million and 100 million XRP also show fluctuating activity, with recent decreases adding to the bearish narrative. However, some minor bullish cues exist.
XRP supply distribution by balance of addresses.
Addresses holding between 100,000 and 1 million XRP have shown stability, indicating that smaller holders may be accumulating XRP. Additionally, the undervalued MVRV ratio could attract long-term investors, potentially providing a foundation for a recovery in the future.
Yet, until stronger accumulation patterns or market shifts emerge, the overall sentiment remains bearish.
A Bearish Pattern Adds To XRP Price Troubles
Moreover, the XRP USD pair has broken below a bearish technical setup called the ‘rising wedge.‘
Although bulls are desperately trying to push XRP prices back inside the pattern, a break out on top of the prevailing bearish sentiment could introduce panic in the market.
The rising wedge pattern signals a potential reversal in the current trend. Identified by two upward-sloping lines converging towards each other, the resistance line ascends at a gentler slope than the support line.
XRP USD pair formed a bearish setup with a 36% downside target. Source: Tradingview
The pattern forms during an upward trend with a series of higher highs and higher lows, indicating reduced buying momentum. As the wedge progresses, the distance between the resistance and support lines decreases, showing weakening momentum.
Typically, the rising wedge leads to a downward breakout. The price breaks below the support line, often with increased trading volume, signaling strong selling pressure.
Traders calculate the price target for the pattern by measuring the vertical distance between the wedge’s initial high and low points and subtracting this from the breakout point.
Per the rules of technical analysis, if the Binance Coin price breaks below the bearish pattern, the XRP coin price might fall to the theoretical price target near $0.34, a drop of nearly 36% from current levels.
The post XRP Price Struggles Bearish On-Chain Cues—Is a 36% Crash Inevitable? appeared first on CoinChapter.
