Over the recent period, Ripple’s digital asset XRP has been displaying a lackluster performance, indicating a trend likely to persist. The cryptocurrency has already recorded a decrease of 1.71%, with expectations pointing towards further declines.
Possible Breakdown Due to Consolidation of XRP
XRP has entered a phase of consolidation within a defined daily range for more than a year, a trend that commenced in August as per the analysis conducted by CryptoCrypto. These consolidation phases typically indicate accumulation periods, where the price fluctuates between upper and lower boundaries, often setting the stage for a significant breakout or breakdown.
Currently, XRP has experienced a rebound from the upper resistance line, with indications suggesting a potential descent towards the channel’s lower end. This movement may lead to increased buying pressure, potentially driving the asset’s price higher and maintaining its oscillation pattern.
Nevertheless, as per the insights provided by CryptoCrypto, the heightened selling pressure might jeopardize the stability of the lower support line, resulting in a further depreciation of XRP’s value.
Upward Pressure from Increased Supply
An analysis by CryptoCrypto utilizing data from Cryptoquant has highlighted a noticeable uptick in XRP’s Exchange Supply Share within the last 24 hours, foreshadowing a potential substantial price decline. This surge in supply indicates a higher presence of the token on exchanges, exerting downward pressure on its price due to an influx of potential sellers.
There has been a significant surge in supply, often driven by whales transferring substantial amounts of XRP to exchanges for selling purposes. Notably, recent data from Lookonchain revealed a transaction where a whale moved 95 million XRP, equivalent to over $49 million, within a short period, with several other similar transactions reported.
Additionally, Cryptoquant’s data outlined a consistent rise in the exchange inflow of XRP since the beginning of the month, further boosting the total supply available on exchanges.
Impact of Retail Traders on XRP’s Bearish Movement
An in-depth examination of Open Interest (OI) by Coinglass, tracking unsettled transactions, showcased a substantial 7.02% decrease to $563.97 million, indicating an increased activity of retail traders with potential implications for a downward trend in XRP’s price.
This bearish sentiment is reinforced by the Parabolic SAR (Stop and Reverse) indicator, which aids in identifying potential price reversals and momentum shifts, characterized by dots appearing above or below price bars on charts. The current position of these dots for XRP suggests an impending decline in value during the upcoming trading sessions.
If the downward pressure persists, XRP could potentially test support levels at $0.4319, or even dip lower to $0.3823 in case the selling pressure intensifies.