Ripple Price Analysis: XRP recovery becomes a major uphill battle despite stronger on-chain metrics

  • Ripple is trading within a descending parallel channel while facing increased overhead pressure.
  • MVRV shows that most Ripple holders are at a loss and are unlikely to sell.
  • XRP whales increase their risk appetite in spite of the weak technical levels.
  • Ripple will resume the uptrend to $0.5 if the channel's middle boundary support is reclaimed.

Ripple is trading at $0.43 after losing the ground above $0.45. Last week's trading was difficult for the bulls, especially with the intense selling pressure under $0.5. At the time of writing, XRP's least resistance path is downwards, particularly after losing the ground above a crucial technical pattern.

Ripple's improving on-chain picture

As the price drops further, Ripple whales' risk appetite becomes insatiable. Santiment's holder distribution metric reveals that large volume holders are consistently filling their bags. For instance, whales holding more than 10 million XRP bottomed out at 297 on February 22, traced a 30-day moving average, and have shot up to 309 at the time of writing.

The increase in the number of whales with tokens from 10 million to infinity is a bullish signal. As the buying pressure rises, Ripple's tailwind is bound to intensity, eventually lifting the prices higher.

Ripple holder distribution

Ripple holder distribution

Ripple's MVRV ratio stands at 0.43 and shows the profitability or loss of XRP to its holders. According to Santiment, this on-chain metric tracks "the average profit or loss of those holding XRP tokens which moved in the last 30 days, based on the price when each token last moved."

Note that an MVRV ratio of 2.0 shows that XRP holders, on average, have a return on investment of 2x the initial investment. On the other hand, an MVRV ratio of 1.0 or less says that most holders are at a loss and, therefore, are unlikely to sell. In other words, it is a good time to buy XRP as recovery will eventually come into the picture.

Ripple MVRV model

Ripple MVRV model

Ripple's technical picture is weakening, leaving tentative support levels vulnerable. Losing the descending channel's middle boundary support opened the Pandora box. Meanwhile, the lower edge of the channel is functioning as the immediate support. The downtrend has been validated by the Relative Strength Index (RSI) as it drops toward the oversold area.

XRP/USD 4-hour chart

XRP/USD 4-hour chart

Looking at the other side of the picture

It is worth mentioning that it is not all lost for the bulls because holding above the support channel's lower edge could return market stability. Moreover, gains above $0.45 are likely to shift the focus back to $0.5. However, the uptrend will not come easy due to the hurdles anticipated at the 100 Simple Moving Average (SMA) and the 50 SMA on the 4-hour chart.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed

Latest Crypto News

Latest Crypto News & Analysis

Editors’ Picks

Cardano partners with Chainlink to drive smart contract development for DeFi applications

Cardano recently announced a strategic partnership with decentralized blockchain oracle network Chainlink. The third-generation blockchain is preparing to build smart contracts for decentralized finance (DeFi) applications.

More Cardano news

Huobi to stop servicing Chinese users as China vows strict crackdown on crypto

A few months after the cryptocurrency mining ban in China, the country issued another update last week, reiterating that digital assets are banned and crypto exchanges are prohibited. Shortly after the announcement was revealed, Bitcoin and altcoins plunged.

More Cryptocurrencies news

Ethereum bears contemplate a drop to $2450

ETH price is building up downside pressure while clinging to the 200-SMA support. RSI remains flat below the midline, keeping the sellers cheerful. A drop towards $2450 remains in the offing if the 200-SMA caves in.

More Ethereum News

Polkadot price at make-or-break point

Polkadot price spots a potential symmetric triangle pattern on the 1D chart. RSI stands neutral at 50.00, suggesting a lack of clear directional bias. 21-DMA offers immediate resistance.

More Polkadot News


Bitcoin Weekly Forecast: Markets revert to mean, but BTC price remains indecisive

Bitcoin price shows considerable strength after springing from the recent crashes. Still, it is uncertain whether the current bullish impulse will morph into a new uptrend or lead to a more profound decline.

Read the weekly forecast