- XRP’s price has shown a bearish pattern, potentially driving it down to $0.47.
- Selling pressure on XRP has increased over the last seven days.
- Most technical indicators suggest that XRP may not test the bearish pattern.
Discover the latest developments in XRP’s price action and what it means for investors.
XRP’s Bearish Outlook
CoinMarketCap’s data revealed that XRP’s momentum has declined, with its price only moving marginally in the last 24 hours. At the time of writing, XRP was trading at $0.5297 with a market capitalization of over $29.3 billion, making it the seventh largest cryptocurrency.
In the meantime, a bearish pattern emerged on the token’s daily chart. AMBCrypto’s analysis found that a bearish pennant pattern formed in mid-April when XRP witnessed a major price drop. Since then, the token’s price has consolidated inside the pattern.
If XRP tests the pattern, its price action could soon turn bearish and plummet under the lower trendline, resulting in further southward price movement.
Market Metrics and Sentiment
AMBCrypto analyzed Santiment’s data to see whether metrics backed the possibility of a price decline. As per our analysis, XRP’s exchange inflow spiked several times last week. A rise in this metric indicates that investors were dumping the token, suggesting high selling pressure.
Its NVT ratio also shot up sharply on the 24th of May, indicating that XRP might be overvalued. Whenever an asset is overvalued, it hints at a price correction. Another bearish metric was the MVRV ratio, which declined in the last few days.
However, a few other metrics looked optimistic. For instance, the token’s weighted sentiment increased, meaning that investors were confident in the token as bullish sentiment dominated the market. AMBCrypto’s look at Coinglass’ data revealed that the token’s long/short ratio also increased in the last 12 hours. A high long/short ratio can be inferred as a bullish signal, suggesting a greater desire among investors to buy the asset.
Which Way is XRP Headed?
To better understand whether XRP would turn bearish soon, AMBCrypto examined its daily chart. We found that after a dip, XRP’s Chaikin Money Flow (CMF) registered an uptick. The Money Flow Index (MFI) also went northward, indicating a price rise. If these indicators turn out to be true, then XRP might not test the bearish pennant pattern and continue to remain bullish.
Conclusion
If XRP manages to remain bullish, its price might reach $0.544 first, as liquidation would rise at that level. Generally, high liquidation results in price corrections. On the other hand, if XRP tests the bearish pattern, its price might plummet to $0.47 in the coming days.
