Ripple (XRP) is not the best horse in the race as it is supposed to be.A closer look at technical analysis suggests that XRP could face a pullback to $0.55.
the #blockchain payments project #Ripple and its native #token #XRP have been in the news this week, seemingly for the right reasons. This is due to a sharp rise in the cryptocurrency's price and a partial victory in the long-running legal battle between Ripple and the US Securities and Exchange Commission.
These two events have generated a lot of comments online, indicating the unprecedented rise of XRP. However, notable observations on the blockchain indicate that this sentiment may not be entirely accurate.
One of the ways BeInCrypto analyzes the potential performance of XRP is by estimating the Sharpe ratio. This ratio measures the risk associated with a token compared to the return that the token can provide. A positive Sharpe ratio means that good returns can be expected.
However, a negative ratio indicates that the cryptocurrency in question is either not risky or could lead to losses. According to Messari data, the Sharpe Ratio for XRP is 3.70.
During the aforementioned rise to $0.65, the ratio was 4.93, indicating that the token was worth buying. Currently, the negative value indicates that this is no longer the case. Therefore, calls for the rally to continue may prove untenable.
Ripple Sharpe Ratio.
The fall in the ratio is explained by the fall in the price: on August 8, the price rose by 20% and traded at $0.65. Currently, it stands at $BTC In addition, according to the chain Santiment, the average age of coins (MCA) has increased. Simply put, MCA is the average of all tokens on the blockchain. An increase in this metric means that tokens that have been dormant for a while have moved to a new level.
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