XRP has been trading sideways for the past few days, struggling to find momentum amidst weak market conditions. The token has stabilized around key support levels due to the lack of bullish signals across the broader crypto sector.
Increased pressure, investor participation, and profitability are all declining, suggesting potential downside risks.
XRP investors withdraw
New XRP addresses have seen a noticeable decline, reflecting waning interest from new investors. Earlier this month, the number of new wallet creations surged to a four-month high, but has since plummeted to around 6,336. This slowing growth indicates that new buyers see little incentive to invest in XRP at current levels.
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This reduction in participation could weaken liquidity and slow price recovery. Without an influx of new capital, the demand needed to boost XRP could disappear. If this trend continues, altcoins may remain range bound.
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The MVRV long/short differential is currently close to 3%, reflecting the shrinking returns for long-term holders (LTH). Historically, a positive number indicates healthy profitability, while a declining number indicates declining profits. The recent decline suggests that even experienced investors are seeing declining returns from their stock holdings.
If long-term holders realize profits or start unwinding their positions, this could put selling pressure on the XRP price. A continued decline in the MVRV ratio often coincides with a decline in reliability, making small corrections more likely.
XRP price may need to rise
XRP is trading at $2.32, above the key support level at $2.28. The altcoin has made multiple attempts to break above $2.36, but has struggled to maintain momentum amid weak investor participation.
Given the current on-chain and technical setup, XRP could continue to consolidate between $2.28 and $2.13 if selling pressure increases. A break below $2.13 would strengthen the bearish outlook and delay the recovery.
However, if investor confidence improves and capital inflows strengthen, XRP could succeed in pushing $2.36 into support. This move would pave the way for $2.45 and even $2.52, again indicating bullish sentiment and invalidating the current bearish theory.
