Ripple [XRP] is currently under pressure, struggling to maintain its recent price levels. The asset is trading at $0.5361, indicating a growing bearish trend over the last few weeks.
Various technical indicators such as the Relative Strength Index (RSI) and moving averages suggest that the market is heading towards oversold territory. Additionally, data shows a continuous decline in XRP’s supply in profit.
XRP Prepares for Further Declines
XRP’s recent price action illustrates its challenge in reclaiming upward momentum, trading below both the 50-day and 200-day moving averages. The 50-day moving average stands at approximately $0.5787, while the 200-day moving average hovers around $0.5509.
This situation hints at a potential “death cross,” a bearish signal confirmed when the 50-day moving average crosses below the 200-day moving average. Such a crossover is generally seen as a negative indicator, signaling a possible continuation of XRP’s downtrend in the near future.
Moreover, XRP has struggled to breach significant resistance levels, emphasizing the absence of bullish momentum and reinforcing the prevailing bearish sentiment in the market.
The Relative Strength Index (RSI) for XRP is currently at 39.76, indicating proximity to oversold conditions. An RSI below 40 typically indicates strong selling pressure and a potential undervaluation of the asset.
While a low RSI might hint at a forthcoming rebound, the lack of robust market momentum implies that any potential reversal could be short-lived unless there is a substantial surge in buying interest.
Declining Address Activity
An analysis of Ripple’s daily active address chart shows a recent decrease in activity. The number of active addresses reached approximately 23,000 between September 1st and 3rd but has since dropped, fluctuating between 20,000 and 19,000 over the past two days.
The downward trend in active addresses suggests a weaker possibility of XRP price appreciation. Reduced on-chain activity typically indicates lower user engagement and market participation.
Insufficient activity diminishes the case for a significant price surge in XRP, as decreased network engagement can signal diminishing investor interest and trading volume.
Increased XRP Underwater Supply
Analyzed data reveals that the recent price decline has significantly impacted XRP’s supply in profit. Around August 24th, the supply in profit was approximately 87.2 billion XRP. However, this figure has dropped to about 77.7 billion XRP at present.
This notable decline underscores how the ongoing downward pressure on XRP has pushed more holders into loss positions. The rapid decrease in supply in profit mirrors the broader bearish trend, indicating fewer investors can sell at a profit amidst the falling prices.