Ripple (XRP) has been on a downward trend, potentially extending its seven-day price decline by closing below its 20-day exponential moving average (EMA) for the fourth consecutive day on May 31. This movement below the 20-day EMA is a bearish signal, indicating that XRP's current price has fallen below its average price over the last 20 days. For investors, this could suggest a shift in the market trend towards selling.
Technical Data on Ripple
An analysis of some of XRP's key technical indicators supports the possibility that the altcoin might lose additional value in the coming days. At the time of writing, XRP's key momentum indicators are below their neutral points. Specifically, the relative strength index (RSI) stands at 46.64, and the money flow index (MFI) is at 40.96. These values suggest that the demand for XRP has decreased as market participants are choosing to distribute their existing assets rather than purchase new tokens.
Supporting this bearish outlook, data from Santiment reveals that XRP's daily active addresses, as observed using a 30-day moving average, have dropped by 30% over the past month. This decrease in active addresses reflects reduced user engagement and transaction activity on the Ripple network.
Daily Trading on XRP
The daily creation of new addresses for altcoin transactions also declined by 29% during the same period. A reduction in both active and new addresses often precedes a decline in token price. Despite this, day traders have continued to find profits. XRP's daily trading volume yielded a profit/loss ratio of 1.16, indicating that for every loss-making transaction, there are 1.16 transactions that result in a profit.
Interestingly, XRP's negative market capitalization to realized value (MVRV) ratio has provided a buy signal for contrarian investors. According to Santiment, XRP's MVRV rates on the 30-day and 365-day moving averages were -0.7% and -8.5%, respectively. This metric tracks the ratio between the current market price of a token and the average price at which it was purchased, suggesting that XRP might be undervalued at current prices.
Ripple (XRP) has been trending downwards, staying below the 20-day EMA for the last four days. XRP's technical indicators show that its price could fall further, as decreased demand and reduced network activity put pressure on the altcoin. However, the profit/loss ratio and the negative MVRV ratio provide some hope for traders looking to capitalize on potential rebounds. Investors should closely monitor these indicators and market trends to make informed decisions.
