XRP faces rejection at key resistance; Here’s what on-chain stats suggest:
XRP has been in a downtrend for over a week due to lack of demand. The coin has retouched a multi-month low at the time of writing. Wider market weakness also continues to be blamed, along with a whirlwind of regulatory roadblocks resulting from the SEC’s lawsuit against Ripple.
Overall, it was not a very favorable time for the altcoin. According to CoinMarketCap, XRP’s market cap has fallen 7% in the past 24 hours. The market capitalization of the coin was $29.13 billion at the time of writing.
The global crypto market cap was $1.85 trillion after falling 1.8% over the past day. XRP’s all-time high was $3.84 and at current market value, XRP is down more than 80%.
XRP Price Analysis: Four Hour Chart
XRP was priced at $0.607 on the four-hour chart. Image source: XRP/USD on TradingView
XRP was priced at $0.607 at the time of writing and is down $6.7% in the past 24 hours. In the past week, the market value of the digital asset fell by more than 17%.
The coin has faced repeated rejection at the $0.700 level for a week, consistent rejection has led the bears to take over the market.
The bulls have been driven out of the market and so buyers have emerged from the market. With each rejection, XRP experienced a sell-off. Trading volume was also shown in red, which is in line with the coin’s market cap.
The immediate resistance for the coin was $0.700 and then $0.770. If prices plummet further, the coin’s next support line would wait at $0.59, a level the coin last visited in the month of February 2022.
XRP has witnessed a decline in purchasing power on the four-hour chart. Image source: XRP/USD on TradingView
The cryptocurrency has witnessed attacks of overselling and underbuy for the past week and a half. During that time, XRP has consistently recorded declining purchasing power.
Prices of the coin have remained below the 20-SMA due to the sell-off. As mentioned above, with a rebound in buyers, XRP could start trading above the 50-SMA mark which coincides with the $0.770 resistance sign.
On the Relative Strength Index, the indicator was below the 25 mark, indicating oversold conditions in the market at the time of writing.
Related literature | Ripple CEO Says Bitcoin Tribalism Is Holding Back the Crypto Industry
Does the on-chain analysis invalidate the coin’s bearish thesis? We don’t think so!
The development activity of the currency has also suffered according to Santiment data. XRP registered an increase in development activity in the month of September last year. The currency hit a high of 69 last year.
Since then, XRP’s development activities have declined sharply. At the time of writing, the coin was standing at 14, showing that XRP has underperformed significantly in this area.
XRP development activity. Image source: Holiness
In terms of the social aspect of the currency, the digital asset has also lagged. This showed severe bearishness on the chart, as one reason buyer confidence was poorly reflected.
A decline in social dominance means that the cryptocurrency is starting to lose its hype and popularity, especially in favorable times such as a bull run.
Social volume and social dominance of XRP. Image source: Holiness
The currency’s social dominance has fallen sharply since December 2020. The current value stood at 1.92%, which is a drop of almost 90% since December 2020.
Social volume also plummeted with periods of highs and lows on the chart. The choppy social volume is an indication of declining confidence in the currency, which represents a bearish position for XRP.
While the market appears to be in the accumulation phase, based on the stats given above, it is safe to assume that the coin itself has not experienced too much accumulation, which equates directly to a smaller number of buyers entering the market.
Currently, in order to invalidate a bearish price action, the coin must begin to experience a growth in purchasing power, if not, XRP may remain locked into this particular price action for the foreseeable future.
Related literature | Ripple CEO Optimistic on SEC Case, Why XRP Saw Weak Response
Featured image from UnSplash, charts from Tradingview.com and Santiment.com