XRP Shows Signs of Cooling After July Rally Amid MVRV Death Cross and Volume Decline

• XRP price has cooled significantly after its July rally, showing signs of short-term weakness.

• The MVRV ratio death cross indicates holders may face losses, increasing selling pressure.

• Technical indicators and volume trends suggest XRP could consolidate or test lower support levels soon.

XRP price down 17% from July highs amid bearish MVRV death cross and slowing volume. Stay updated with COINOTAG for expert crypto insights.

What Does the XRP MVRV Death Cross Mean for Investors?

The XRP MVRV ratio recently formed a death cross, a bearish indicator where the short-term market value to realized value ratio crosses below the long-term ratio. This suggests that many holders are moving into loss territory, which often precedes increased selling pressure and deeper price corrections. This signal is critical for investors monitoring XRP’s momentum.

How Is XRP’s Trading Volume Affecting Market Sentiment?

Trading volume for XRP has dropped by over 23% to $4.83 billion, signaling reduced spot market activity. Meanwhile, derivatives open interest rose slightly by 2%, while derivatives volume fell 34%. This divergence indicates traders may be holding positions cautiously rather than actively trading, reflecting uncertainty and a wait-and-see approach in the market.

What Do Technical Indicators Suggest About XRP’s Short-Term Price Movement?

XRP currently trades just below key short-term moving averages, with the 10-day and 20-day EMAs at $3.02 and $3.01 respectively, both indicating sell signals. The relative strength index (RSI) at 51.29 remains neutral, while the Stochastic RSI nearing 14 hints at an oversold condition, potentially allowing a short-term bounce. However, longer-term EMAs at $2.79 (50-day) and $2.34 (200-day) continue to support an overall upward trend.

What Are the Key Support and Resistance Levels for XRP?

XRP faces resistance near $3.20, which it must reclaim to resume upward momentum. Support levels are critical at $2.95 and $2.75; a break below $2.75 could lead to testing the $2.50 zone. These levels will be closely watched by traders amid the current bearish signals.

How Are Market Experts Interpreting XRP’s Current Trends?

Crypto analysts highlight the MVRV death cross as a significant warning sign, emphasizing the need for caution. On-chain data and volume trends reinforce the view that XRP is in a consolidation phase, with potential for short-term volatility. Expert commentary from COINOTAG underscores the importance of monitoring support zones to gauge the next directional move.

Frequently Asked Questions

What is the MVRV death cross and why does it matter for XRP?

The MVRV death cross occurs when the short-term market value to realized value ratio crosses below the long-term ratio, signaling that holders are entering loss territory. For XRP, this often precedes price corrections and increased selling pressure.

Is XRP likely to recover soon after the recent decline?

XRP may experience a short-term bounce due to oversold technical indicators, but sustained recovery depends on reclaiming key resistance levels and market sentiment stabilizing.

Key Takeaways

• XRP price dropped 17% from July highs, signaling cooling momentum.
• The MVRV death cross indicates potential for deeper price corrections.
• Technical and volume indicators suggest cautious trading and possible consolidation.

Conclusion

XRP’s recent price decline and bearish MVRV death cross highlight a cautious market environment. While short-term technical indicators suggest potential for a bounce, key support and resistance levels will determine the next trend. Investors should monitor these signals closely as XRP navigates this volatile phase.

XRP is showing signs of cooling off after its July rally, trading at $2.99 at press time, down nearly 17% from its July 18 all-time high of $3.65.

• XRP is down 17% from its July peak amid cooling market momentum.
• MVRV death cross suggests potential for a deeper correction.
• Technical and volume indicators point to short-term weakness.

Despite a 6.2% increase over the last day, XRP (XRP) is still 7% lower for the week, indicating short-term volatility. An on-chain signal that may indicate additional declines coincides with this pullback.

XRP MVRV ratio flips bearish

On Aug. 4, crypto analyst Ali Martinez posted that the Market Value to Realized Value ratio for XRP had formed a death cross, a bearish signal that often precedes deeper corrections. The MVRV ratio compares a token’s current market cap to the average value of all tokens at the time they last moved on-chain. 

When this ratio falls, it suggests holders are moving into loss territory, which can trigger selling pressure. When a short-term MVRV trend crosses below a longer-term one, it is referred to as a “death cross” and is usually seen as an indication that momentum has shifted to the downside.

XRP trading volume slows, derivatives show mixed sentiment

The recent price movement of XRP has been accompanied by a decline in trading volume. Volume fell more than 23% to $4.83 billion on the last day, a sign of declining spot interest. According to Coinglass data, open interest increased by 2% to $7.33 billion, while volume in the derivatives market dropped 34% to $8.06 billion.

Declining volume and rising open interest may indicate that traders are holding positions rather than actively trading, which would reflect market caution.

Technical indicators suggest a cautious outlook

XRP is positioned just below important short-term moving averages, with both the 10-day EMA at $3.02 and the 20-day EMA at $3.01 flashing “sell” signals. At 51.29, the relative strength index is in neutral territory and does not provide a clear indication of direction. A short-term bounce may be possible as the Stochastic RSI is close to 14, indicating that the token is approaching an oversold zone.

XRP daily chart. Credit: crypto.news

Longer-term moving averages continue to back a more general upward trend. Both the 50-day and 200-day EMAs show underlying strength at $2.79 and $2.34, respectively. Before trying to regain the $3.20 resistance level, XRP might consolidate if it stays above $2.95. The next support zone, which is around $2.50, could be tested if the price breaks below $2.75.

With the MVRV death cross now in play, market participants will be closely watching whether buyers can defend key support levels or if XRP is set for a deeper correction in the coming days.