- 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.
