XRP recovery is becoming a major battle despite stronger on-chain metrics

  • Ripple is trading within a descending parallel channel while there is increased overhead pressure.
  • MVRV shows that most Ripple owners are at a loss and are unlikely to sell.
  • XRP whales are increasing their risk appetite despite the poor technical level.
  • Ripple continues the uptrend to $ 0.5 when support for the channel’s middle limit is restored.

Ripple is trading at $ 0.43 after the bottom dropped above $ 0.45. Last week’s trading has been tough for the bulls, especially given the strong selling pressure below $ 0.5. At the time of this writing, the path of least resistance from XRP is down, especially after losing ground over a crucial engineering pattern.

Ripple improves the picture in the chain

If the price continues to drop, the Ripple whales’ risk appetite will become insatiable. Santiment’s holder distribution metric shows that large volume holders are constantly filling their pockets. For example, whales with more than 10 million XRP hit bottom at 297 on Feb.22, a 30-day moving average, and are up to 309 at the time of writing.

The increase in the number of whales with tokens from 10 million to infinity is a bullish signal. When buying pressure rises, Ripple’s tailwind is tied to intensity, which ultimately drives prices up.

Distribution of the shaft holder

Ripple’s MVRV rate is 0.43, showing holders the profitability or loss of XRP. According to Santiment, this on-chain metric captures “the average profit or loss of those who own XRP tokens that have moved in the last 30 days, based on the price at which each token last moved”.

Note that an MVRV ratio of 2.0 shows that XRP holders, on average, will have a return on investment that is 2x their original investment. On the other hand, an MVRV rate of 1.0 or less means that most owners are at a loss and are therefore unlikely to sell. In other words, it is a good time to buy XRP as a recovery will appear at some point.

Ripple MVRV model

Ripple MVRV model

Ripple’s technical picture is weakening, leaving tentative support levels vulnerable. With the loss of the middle limit support of the descending channel, the Pandora box was opened. Meanwhile, the lower edge of the channel acts as an immediate support. The downtrend was confirmed by the Relative Strength Index (RSI) falling towards the oversold area.

XRP / USD 4 hour chart

XRP / USD 4 hour chart

Look at the other side of the picture

It is worth noting that all is not lost for the bulls as holding above the bottom of the support channel could restore market stability. Additionally, gains above $ 0.45 should shift focus back to $ 0.5. However, the uptrend will not be easy due to the expected hurdles at the 100 Simple Moving Average (SMA) and 50 SMA on the 4-hour chart.

Comments are closed.