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- XRP continues to trade below its level 20-day exponential moving average.
- This indicates a decrease in buying pressure.
ripple [XRP] The price decline may extend for seven days as it closed below the 20-day Exponential Moving Average (EMA) for the fourth day in a row on May 31.
When an asset is trading below this key moving average, it is a bearish signal because it indicates that its current price has fallen below its average price over the past 20 days. Traders take this as an indication that the market trend is shifting towards sell-offs.
Demand for XRP is losing steam
AMBCrypto’s assessment of some key technical indicators for XRP confirmed the possibility of the altcoin losing some of its value in the coming days. For example, major momentum indicators were below their neutral points at the time of writing.
XRP’s Relative Strength Index (RSI) stands at 46.64, while its Money Flow Index (MFI) stands at 40.96.
With these values, these indicators indicate a decline in demand for XRP as market participants prefer to distribute their existing holdings rather than purchase new tokens.
Source: XRP/USDT, TradingView
The rise in XRP selling pressure was confirmed by a decrease in active on-chain addresses.
for every Santiment According to the data, daily active addresses for XRP observed using a 30-day moving average have fallen by 30% in the past month.
Likewise, the daily number of new addresses created for altcoin trading during the same period also decreased by 29%.
Source: Santiment
It is worth noting that a decrease in active and new addresses of an asset often heralds a decline in its price.
Now might be the right time
Interestingly, despite the decline in altcoin demand and price, day traders continued to post profits.
Evaluating XRP’s daily ratio of transaction volume in profit to loss (using a 30-day moving average) returned a value of 1.16.
This indicates that during that period under review, for every transaction that ended in a loss, 1.16 transactions generated profits for XRP traders.
Source: Santiment
For traders looking to trade against the market, XRP’s negative market cap to realized value (MVRV) ratio may flash a buy signal.
According to Santiment data, the MVRV ratios for XRP on the 30-day and 365-day moving averages were -0.7% and -8.5%, respectively, at the time of writing.
This metric tracks the ratio between the current market price of an asset and the average price at which each of the coins or tokens was acquired.
Source: Santiment
Realistic or not, here it is The market capitalization of XRP in terms of BTC
When it is negative like this, the asset in question is undervalued. It indicates that the current market value of that asset is less than the average purchase price of all tokens in circulation.
It provides a good opportunity to buy because the asset is trading at a discount compared to its historical cost basis.
