XRP Faces Continued Decline as Technical Indicators Signal Bearish Trend

• XRP closes below its 20-day EMA for the fourth day, signaling a bearish trend and potential for further sell-offs.
• RSI and MFI indicate declining demand, with active and new addresses dropping 30% and 29%, respectively.
• Despite bearish signals, some traders’ profit and negative MVRV ratios suggest XRP is an undervalued buying opportunity.

Ripple (XRP) is experiencing a prolonged downturn, closing below its 20-day exponential moving average (EMA) for the fourth consecutive day. This movement below a critical moving average signals a bearish trend, indicating that XRP’s current price has fallen below its average over the past 20 days, a clear sign for traders to brace for further sell-offs.

Key technical indicators suggest that XRP might see additional value erosion in the near term. XRP’s Relative Strength Index (RSI) stands at 46.64, while its Money Flow Index (MFI) reads 40.96. These figures imply a waning demand for XRP, as market participants are more inclined to distribute their existing holdings rather than acquire new tokens.

The trends revealed by the falling MA of active addresses on XRP’s chain suggest increased sell pressure. According to a notable analytical platform, Santiment, the 30-day moving average of daily active addresses has declined by 30% within the past month. Similarly, the daily creation of new addresses for trading the altcoin has reduced by 29% in the same period, as shown below. 

Despite these bearish signals and reduced demand, some traders profit from daily trading activities. XRP’s daily ratio of transaction volume in profit to loss (measured over a 30-day moving average) shows a value of 1.16. This indicates that 1.16 transactions have been profitable for XRP traders for every transaction that results in a loss.

Santiment’s data shows that XRP’s MVRV ratios on 30-day and 365-day moving averages are -0.7% and -8.5%, respectively. A negative MVRV ratio suggests that the asset is undervalued, with the current market value being lower than the average purchase price of the tokens in circulation.

Adding to the intrigue, the on-chain transaction tracker Whale Alert reveals significant accumulation activities by two whales associated with Binance. The first whale transferred 50.30 million XRP to the unknown wallet, while the second moved an equal amount to the unknown wallet address. According to Bithomp’s data, both wallets were activated on the same date, raising questions about the motives behind these substantial transactions.

XRP faces bearish market conditions, with technical indicators pointing to potential further declines. However, opportunities for profit and signals for strategic buying still exist for astute traders willing to navigate the volatile landscape.