Analyzing XRP’s Potential Decline: Will the Cryptocurrency (XRP) Revert to $0.56?

  • Historic patterns suggest that XRP’s price may be poised for an imminent rise.
  • The token was oversold, suggesting a reversal to the north.
  • DAA fell more than XRP’s price, indicating that $0.50 could be a good entry.

XRP, the native token of the XRP Ledger, shows signs of a potential price increase. The token was recently oversold, and the Daily Active Addresses (DAA) fell more than XRP’s price, suggesting a possible entry point at $0.50.

RSI Indicates Oversold Status

XRP became oversold on the 12th of May, as indicated by the Relative Strength Index (RSI) on the 4-hour chart. The RSI is a technical indicator that shows if a cryptocurrency’s momentum is bullish or bearish. A reading at 70 and above suggests that a token is overbought, while a reading at 30 or below indicates that the asset is oversold. On the 12th of May, the RSI for XRP dropped to 30.09 before rising to 35.65, suggesting a significant bounce could be in motion.

Price-DAA Divergence

Another metric considered was the price-DAA divergence. DAA tracks the level of user interaction on the network. With the price-DAA divergence, traders can find entry and exit points. If the price grows more than the DAA, then it could be a sign to buy. On the other hand, a situation where the price declines more than the DAA is a solid exit signal. As of this writing, the cryptocurrency’s price-DAA was -58.28%, indicating that activity on the XRP Ledger has been unimpressive.

XRP’s Correlation with BTC

As of this writing, BTC’s correlation coefficient with XRP was 0.56. Values of the correlation coefficient range between -1 and +1 where the former indicates divergence while the latter a strong similar movement. Therefore, XRP’s correlation with the number one cryptocurrency per market cap was weak. This suggests that if the price of Bitcoin fails to move northward, that might not stop XRP from rising in the $0.56 direction.

Conclusion

In conclusion, historic patterns and current metrics suggest that XRP’s price may be poised for an imminent rise. The token was recently oversold, and the DAA fell more than XRP’s price, indicating that $0.50 could be a good entry point. However, traders should not rely on these indicators alone and should consider other market factors before making a decision.

Don't forget to enable notifications for our Twitter account and Telegram channel to stay informed about the latest cryptocurrency news.

BREAKING NEWS

Massive BTC ETF Outflows and Market Fear: Key Insights on Bitcoin’s Struggle Below $84,000

In a significant development this week, Deribit's Asia-Pacific Business...

21Shares to Liquidate Bitcoin ETFs Amid Market Downturn: Last Trading Day on March 27th

21Shares, a prominent player in cryptocurrency asset management, has...

Whale Withdraws 365,000 AUCTION Tokens from Binance, Signaling Potential Price Volatility

On March 16th, COINOTAG reported significant activity in the...

WLFI Expands Its DeFi Portfolio with Significant AVAX and MNT Acquisitions Amidst Market Challenges

According to recent reports from COINOTAG on March 16th,...

Spot Bitcoin ETF Net Inflows Plummet: A Deep Dive into February and March Trends

The latest data from COINOTAG indicates a concerning trend...
spot_imgspot_imgspot_img

Related Articles

spot_imgspot_imgspot_imgspot_img

Popular Categories

spot_imgspot_imgspot_img