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- XRP may need another leg up before consolidating around $0.42 for a while.
- The December breakout and re-test have provided strong hope.
After months of sideways movement since November, Ripple [XRP] showed a strong breakout beyond significant resistance levels on Wednesday. This revealed a fact that supports the strong buyer sentiment behind the asset.
A report highlighted that XRP’s usage has been facilitated and the addition of NFT feature to the XRP Ledger also supported it. Can this buyer sentiment be sustained?
Ripple (XRP)’s breakout above $0.42 was heavy-volume and opened the door for further gains
The old range extended from $0.33 to $0.42, with the midpoint at $0.377. The breakout occurred on March 21 and the range highs were also retested. This was a classic case of support turning into resistance and occurred on a daily timeframe, which increased its significance.
Upward resistance levels at $0.45 and $0.51 may temporarily halt XRP’s buyer sentiment. A four-hour chart could also see a downturn and structurally turn bearish, which could be used as an early sign of the loss of breakout strength.
RSI was at 61.5, showing strong buyer momentum. OBV had started to rise before the breakout and predicted the upward movement. Downward, the $0.42 level itself and the imbalance between $0.39-$0.4 could be used to buy XRP. However, falling to the $0.39 level in the coming days would be a sign of buyer weakness.
Ripple (XRP) MVRV ratio correcting after three-month highs
The 90-day MVRV ratio showed that holders made significant profits during the rise, showing three-month highs. This was followed by a retest of the range highs on the price charts. Except for March 21, there was some selling pressure despite the MVRV ratio being higher since December.
The 90-day average coin age metric continued to decline over the past week, indicating an increasing transfer between addresses for XRP.
The 90-day dormant circulation also showed a spike on March 21. Together, they showed some selling pressure in recent days. The very positive MVRV could mean that more selling could follow, and traders should avoid buying XRP at market prices at the time of publication.
