Ripple’s native token, XRP, has performed impressively over the past week, emerging as one of the biggest gainers among top cryptocurrencies. XRP’s bullish breakout saw it climb over 14%, reaching $0.59 by the week’s end. However, while the surge might seem promising, key metrics reveal potential challenges that could hinder XRP’s ability to sustain this upward trajectory.
A Promising Bullish Breakout
XRP experienced a significant price increase, breaking through important resistance levels, and cementing a bullish outlook. The asset’s daily chart reflected a rise of over 14%, with XRP closing at $0.59 after an almost 4% boost during its final trading session. This upward trend pushed the cryptocurrency above its short-moving average (yellow line), which had previously acted as a resistance level, marking a notable shift in market sentiment.
Further reinforcing this bullish momentum was XRP’s Relative Strength Index (RSI), which hit 60. This level signals that buying pressure had been growing, indicating that traders were becoming more optimistic about XRP’s future price action.
Despite the promising breakout, XRP saw a slight pullback, dipping by over 1% and settling around $0.58 at the time of writing. Still, the token remains positive, with analysts pointing out that its rise above the short-moving average could signal potential for further bullish activity.
Network Metrics Pose Challenges
Despite XRP’s price rally, underlying key metrics such as volume and network activity suggest the surge may face difficulties in maintaining momentum. Analyzing Ripple’s daily active addresses and volume over the past week reveals a lack of sustained engagement.
On September 13, daily active addresses spiked to over 20,000, suggesting increased activity on the network. However, this uptick was short-lived, with active addresses quickly falling to around 17,000 the following day. This decline in activity hints that the price surge was not accompanied by increased user participation, a critical factor in sustaining long-term growth.
Similarly, XRP’s trading volume saw a brief jump, reaching $1.8 billion on the same day, only to drop back down to approximately $1 billion shortly after. The rapid decrease in volume points to a lack of consistent buying pressure, raising concerns about whether XRP has enough market support to continue its upward trajectory.
The disconnection between XRP’s price and network activity suggests that the recent rally may not be as sustainable as some investors hope. For the token to maintain its positive momentum, a significant uptick in both network activity and investor engagement will be necessary.
XRP Among Top Performers
Despite these challenges, XRP remains a top-performing asset. According to CoinMarketCap, it was the second-highest gainer among top cryptocurrencies in the past seven days, rising by nearly 11%. Only Toncoin (TON), which saw a 19% increase, outperformed Ripple during this period.
With a market capitalization of approximately $33.1 billion, XRP holds its position as the seventh-largest cryptocurrency by market cap, underscoring its relevance in the broader crypto landscape.
XRP’s recent bullish breakout is an encouraging sign for investors, especially with the asset breaking through critical resistance levels. However, without stronger support from key metrics like volume and network activity, the rally may be short-lived.
Also Read: Ripple’s XRP Faces Crucial Test – Can Bulls Overcome $0.6 Resistance?
For XRP to continue its upward trend, the cryptocurrency will need to see more sustained engagement from both users and traders. While its price performance has been impressive, Ripple’s future depends on whether it can convert this momentum into long-term growth supported by increased network usage.
As the crypto market remains volatile, XRP’s next moves will likely hinge on broader market trends and shifts in investor sentiment.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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