Ripple’s XRP token is facing a critical juncture, with a recent price slump casting doubt on its future. Analyst Northstar points to a dramatic 85% decline from its 2018 peak, raising concerns about the cryptocurrency’s long-term viability.
Technical Indicators Paint a Mixed Picture
Technical analysis reveals conflicting signals. A long-term symmetrical triangle pattern on the bi-weekly chart suggests XRP’s difficulty regaining momentum. The recent breakdown below the $0.55 support line indicates increased selling pressure, potentially leading to a further drop towards $0.30.
However, a glimmer of hope emerges from the weekly chart. A breakout from a smaller triangle pattern occurred before the market-wide correction pushed the price back down. Now, the once-resistance level of $0.48 acts as crucial support. Holding this level is vital to avoid a fall back into the triangle and potentially steeper declines.
The Stochastic Momentum Index (SMI) currently reflects waning buying interest, further complicating the picture. If XRP fails to overcome the $0.52 resistance, a drop to the $0.4270 support level identified by the Bollinger Band could trigger a steeper decline towards $0.30.
Network Activity: A Potential Indicator of Change
Interestingly, data from Santiment suggests a link between network activity and XRP’s price movements. Historically, periods of high volatility and active addresses on the Ripple network have coincided with significant price swings, both upwards and downwards. The late 2017 bull run and the mid-2021 price drop both mirrored spikes in these metrics.
Currently, with active addresses hovering around 25,900 and moderate volatility, Santiment’s data hints at a possible upcoming price change. Historically, such trends have preceded notable price movements for XRP.
Also Read: Data Reveals – XRP Is A Wall Street Secret, Not A Main Street Gem
XRP at a Crossroads
The technical analysis suggests a possible bearish trend or consolidation phase for XRP. Key support and resistance levels to watch are $0.40 and $0.52, respectively. Falling below support might lead to a decline towards $0.30, while reclaiming resistance could trigger a rise.
However, the historical link between network activity and price movements suggests potential for a shift in momentum. Increased activity and volatility could lead to significant price swings for XRP in the near future. Investors should closely monitor these technical indicators and network activity for signs of a potential breakout or further decline.
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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