Bettors mount pressure on XRP amid signs of a price bottom in on-chain indicators
- XRP dropped below $2 as heightened risk-off sentiment rocked the crypto market.
- XRP's 30-day MVRV Ratio indicates prices may have found a bottom.
- XRP could bounce off a descending channel's lower boundary if it fails to recover the support near $2.00.
Ripple's XRP declined 10% on Monday, trading around $1.96 at press time after odds of its price plunging below $2.00 skyrocketed to 81% on prediction platform Polymarket. Despite the high risk-off sentiment, XRP's 30-day Market Value to Realized Value (MVRV) Ratio indicates prices may have found a bottom.
Bettors anticipated XRP's decline amid market-wide risk-off sentiment
Market sentiment toward XRP has worsened in the past few days, with bettors anticipating a further decline in the remittance-based token.
Odds that XRP will decline below $2 increased from 62% to 81% over the weekend, according to Polymarket data. Meanwhile, odds of XRP reaching a new all-time high of $3.50 declined from 51% at the beginning of March to 7% on Monday.
Shortly after the sharp movement in these odds, XRP breached the $2 level.
The weak prices can be traced to the overall crypto market sentiment, which is seen in the crypto Fear and Greed Index plunging to 20.
Additionally, the failure of US President Donald Trump to mention concrete plans of including XRP in the country's digital asset stockpile wiped out signs of bullish momentum among investors. Trump reiterated his executive order at the first White House Crypto Summit on Friday that the US would establish a Bitcoin reserve and a digital asset stockpile of altcoins using crypto assets from criminal or civil asset forfeiture.
The executive order disappointed investors who had anticipated the government would deploy new capital to purchase Bitcoin and altcoins like XRP, considering Trump's stated intentions of including them in the country's crypto reserve on February 2.
Meanwhile, the increased bearish sentiment has seen XRP's 30-day MVRV Ratio plunge to a low of 16%. The MVRV calculates all investors' average profit/loss over a given time frame.
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XRP 30-day MVRV. Source: Santiment
Over the past year, XRP often notes a reversal whenever the 30D MVRV declines below 10%. As a result, XRP could be primed for a recovery.
XRP eyes descending channel's support as bears mount pressure on $2.00
XRP has witnessed $36.01 million in futures liquidations in the past 24 hours, per Coinglass data. The total amount of liquidated long and short positions accounted for $28.63 million and $7.38 million, respectively.
XRP bears pushed its price below the support near the $2.00 psychological level after it declined into a descending channel over the weekend.
XRP/USDT daily chart
If XRP fails to recover the support near $2.00, the lower boundary of the descending channel could prove crucial to help it initiate a price bounce.
On the upside, XRP has to sustain a firm move above the upper boundary of the descending channel and reclaim the $2.72 level to flip the bearish pressure.
The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) lines declined below their respective moving averages, indicating a potential prolonged increase in the bearish pressure. Meanwhile, the Stochastic Oscillator (Stoch) is in the oversold region, signaling a potential price reversal.
A daily candlestick close below the lower boundary of the descending channel will invalidate the thesis and send XRP toward $1.35.
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
Michael Ebiekutan
FXStreet
With a deep passion for web3 technology, he's collaborated with industry-leading brands like Mara, ITAK, and FXStreet in delivering groundbreaking reports on web3's transformative potential across diverse sectors. In addi
