Ripple (XRP) price is showing signs of a potential pullback. Despite recent bullish momentum, signs of weakening market sentiment suggest the cryptocurrency may struggle to maintain its upward trajectory in the short term.
This analysis examines the cooling sentiment around XRP, the factors driving this shift, and what investors can expect as the asset faces a potential price correction.
Ripple issues sell signal
According to data from Santiment, the Daily Active Addresses (DAA) divergence of XRP price dropped to -74.46% today. The DAA price shows whether user participation in a blockchain is increasing with the price or the opposite.
When the indicator is rising and positive, network activity is increasing, which can serve as a buy signal. On the other hand, a declining DAA price is a sell signal because it indicates a drop in user engagement.
Read more: Ripple (XRP) Price Prediction 2021/2025
If this happens while the price is increasing, it means that the uptrend is weak. Considering the current condition of XRP, the price may decrease if it remains the same.
Ripple DAA Price Divergence. Source: Santiment
The Money Flow Index (MFI) is another indicator that suggests a potential downside. The MFI helps investors assess the flow of money into and out of a cryptocurrency.
When the Money Flow Index increases, it shows that more money is flowing into the asset, signaling an increase in buying pressure. Conversely, a decrease in the MFI indicates an outflow of liquidity, reflecting selling pressure.
XRP Money Flow Index. Source: TradingView
At the time of publication, the MFI has fallen from 81.54 to 65.54, reinforcing the signal reflected by the price-DAA divergence.
XRP Price Prediction
On the daily chart, BeInCrypto noted that the $0.60 region is an important supply region for XRP. As a result, the token has faced resistance in this area on multiple occasions.
Currently, XRP price appears to be approaching this point. This suggests that the crypto could face rejection at the level again, although it appears to have strong support at $0.50.
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The last time XRP faced rejection at this point, the price declined to $0.52. While the price may not experience a similar downtrend, the Fibonacci retracement indicator suggests that XRP could drop to $0.55 in the near term.
Ripple Daily Price Analysis. Source: TradingView
However, if the bulls manage to push XRP above the $0.60 resistance, this prediction could be invalidated, potentially pushing the price towards $0.66.
The article XRP bearish signals intensify and jeopardize growth appeared first on BeInCrypto Brazil.
