XRP loses key support amidst selling pressure from Ripple traders taking profits
- Ripple partners with SBI Digital Commodity, a Japanese financial giant, to boost XRPLedger utility.
- XRP suffers from rising selling pressure as traders took over $230 million in profits in August.
- XRP extends losses on Thursday, slipping under key support at $0.57.
Ripple (XRP) price falls for a second consecutive session, struggling under a key support level, as increased selling pressure from profit-taking outweighs positive developments for the business of the payment-remittance firm.
XRP trades under $0.57 at the time of writing.
Daily Digest Market Movers: XRP falls despite Ripple announcing partnership
- Ripple announced a partnership with Japanese financial giant SBI Digital Commodity on Tuesday. The firm will promote the use of the XRP Ledger in the web3 community through the partnership with Ripple Labs, per their official announcement.
- On-chain data from Santiment shows that XRP traders have consistently taken profits on their XRP holdings. Specifically, XRP traders have taken more than $230 million in gains in August so far, relatively higher than July.
- The Network Realized Profit/Loss metric (NPL) has shown positive spikes since the beginning of August, in a sign that XRP traders are on average selling their holdings at a profit. Consistent profit-taking increases the selling pressure on the asset.
- The level of profit-taking is higher than July, when many traders opted to sell during the sharp correction. The activities have led XRP to slip under the $0.57 support on Thursday, which is a key technical level.
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XRP NPL vs. price
- XRP social dominance has also dropped somewhat over the last week, falling to to 1.65% from 4.55%.
Technical analysis: XRP slips under key support at $0.57
XRP is in downward trend which has extended for more than a year. In the short-term, the altcoin has recovered somewhat after touching a year-to-date low at $0.38 on July 5. Still, any significant recovery from the current price at around $0.56 seems unlikely without a clear catalyst on sight.
The Moving Average Convergence Divergence (MACD) indicator shows there is underlying negative momentum in Ripple price trend.
If this negative bias is confirmed, the altcoin could suffer a nearly 8% decline and dip to the lower boundary of the Fair Value Gap (FVG) at $0.51. Once the imbalance zone is filled, there is a likelihood of a comeback to the target at $0.62, a key resistance level for the asset since mid-March.
XRP/USDT daily chart
A daily candlestick close above $0.60 could invalidate the bearish thesis. In this case, XRP could rally to $0.62.
Ripple FAQs
Ripple is a payments company that specializes in cross-border remittance. The company does this by leveraging blockchain technology. RippleNet is a network used for payments transfer created by Ripple Labs Inc. and is open to financial institutions worldwide. The company also leverages the XRP token.
XRP is the native token of the decentralized blockchain XRPLedger. The token is used by Ripple Labs to facilitate transactions on the XRPLedger, helping financial institutions transfer value in a borderless manner. XRP therefore facilitates trustless and instant payments on the XRPLedger chain, helping financial firms save on the cost of transacting worldwide.
XRPLedger is based on a distributed ledger technology and the blockchain using XRP to power transactions. The ledger is different from other blockchains as it has a built-in inflammatory protocol that helps fight spam and distributed denial-of-service (DDOS) attacks. The XRPL is maintained by a peer-to-peer network known as the global XRP Ledger community.
XRP uses the interledger standard. This is a blockchain protocol that aids payments across different networks. For instance, XRP’s blockchain can connect the ledgers of two or more banks. This effectively removes intermediaries and the need for centralization in the system. XRP acts as the native token of the XRPLedger blockchain engineered by Jed McCaleb, Arthur Britto and David Schwartz.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
