While XRP’s market capitalization may have risen, increased selling puts it at risk of a decline. #XRP #BNB #达摩院
XRP is the fourth largest cryptocurrency by market capitalization.
Demand for the coin has decreased over the past few weeks.
Ripple [XRP] once again overtook the Binance [BNB] currency to become the fourth largest crypto asset by market cap with a market cap of $37.39 billion.
XRP's market capitalization first rebounded to this level as trading volumes surged in the weeks following Judge Analisa Torress's ruling declaring that Ripple's sale of XRP tokens in 2020 did not qualify as the sale of "unregistered securities." .
Research firm Kaiko noted in a recent report that investors turned their attention to altcoins following the ruling, causing altcoin trading volume dominance to jump to a four-month high.
XRP has increased in value by 51% since the July 13 ruling. At press time, the altcoin was exchanging hands at $0.7097. With a 49% price increase over the past month and a corresponding increase in market capitalization, XRP’s current price on the daily chart suggests a correction may be coming.
Maybe now is not the time to imitate
Looking at XRP’s Moving Average Convergence/Divergence (MACD) indicator on the D1 chart, the altcoin started a new bear cycle on July 25. The indicator tracks trends and potential momentum changes in the price of an asset. It consists of two lines: the MACD line and the signal line.
When the MACD line crosses the signal line, as is the case here, a bearish signal is generated, indicating that selling momentum is building.
XRP’s MACD is marked by a red histogram below the zero line, with negative sentiment permeating the daily market at press time.
Its Money Flow Index (MFI) is below the midline at 39.19, which shows that the accumulation of XRP has declined over the past few days. This suggests that buying momentum has declined as more traders have started selling to book profits.
While other key momentum indicators such as the Relative Strength Index (RSI) and Chaikin Money Flow (CMF) were trading above their respective center lines at press time, they are in a downtrend, indicating declining buying pressure.
Reduced demand leads to reduced profits
An on-chain assessment of the token shows a decline in the number of daily active addresses and new demand since mid-July. According to data from Santiment, the number of daily active addresses trading XRP has dropped by 58% since July 13.
The coin has since also suffered from a lack of new demand. Information from the same data provider shows daily new demand for alternatives fell 71% over the same period.
Looking at XRP trading profitability, Santiment data shows that the daily trading loss ratio exceeded the profit ratio last week.
