- XRP price is holding above a stable support level at $0.400.
- The MVRV Z-score indicates that the remittance token remains in the undervalued zone.
- Whales’ accumulation of Ripple could hint at a potential trend reversal around the corner.
Ripple (XRP) price shows a lack of volatility as it sits above a crucial support level that could make or break its short-term future. A spike in buying pressure is what the remittance token needs to kick-start its run-up.
XRP price in an opportunity zone
XRP price has flipped above the $0.400 resistance level for the second time over the last week. Influence from Bitcoin, which is in a good position and could continue its bullish move, lowers the chances of a breakdown of the remittance token’s immediate support level.
Therefore, investors can expect the XRP price to continue the uptrend. Investors punting longs can pay attention to the $0.448 and $0.506 hurdles. Collecting buy-stop liquidity above these levels is the primary objective for market makers. So, investors can book profits at these levels and call it a day.
However, for those willing to risk it, momentum is key. If the Relative Strength Index (RSI) remains above 50 and is not extremely oversold after a retest of $0.506, they can consider hanging on to their trades. A minor retracement could ensue, allowing buyers to accumulate before triggering a quick rally to $0.609.
This move would represent a 54% upswing from $0.395 and is likely where the upside is capped for the XRP price.
XRP/USDT 1-day chart
Further helping the bullish case for XRP price is the Market Value to Realized Value (MVRV) Z-score. This indicator can be used to identify if an asset is overvalued or undervalued relative to its fair value.
In mathematical terms, the MVRV Z-score is obtained by dividing the difference between the total market capitalization and realized market capitalization by the standard deviation of the market capitalization.
The index oscillates around the zero line, with positive values representing overvalued market conditions and negative values representing undervalued conditions.
For XRP, the MVRV Z-score is -1.240 and has been below the zero line since December 2021, suggesting an undervalued market. Bitcoin’s MVRV Z-score is -0.196, which is much closer to zero, suggesting that Ripple is relatively undervalued.
XRP MVRV Z-score
To put things in perspective, whale addresses holding 100,000 to 1,000,000 and 1,000,000 to 10,000,000 XRP tokens have seen accumulation since 2021. Their numbers have grown from 5 billion and 3.8 billion to 6.32 billion and 3.8 billion, respectively.
This accumulation spree from the whales further adds credence to the bullish outlook for XRP price seen from a technical standpoint.
XRP supply distribution
On the other hand, if XRP price breaks down the $0.400 support level, it will be the first sign of weakness. A daily candlestick close below $0.316 foothold will invalidate the bullish thesis by creating a lower low. This move could trigger an 8% downswing to $0.288.
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.