Why Investing in XRP Might Not Be A Good Idea: A Price Prediction Analysis
The price of Ripple (XRP) surged by 30% last week following a positive resolution in the SEC vs. Ripple lawsuit. However, despite the impressive upswing, it failed to establish a higher high, leading to significant offloading of holdings by whale investors. This on-chain movement may indicate a looming major correction in XRP value in the near future.
XRP Price Action
XRP’s price reached a swing high of $0.644 on August 7, which was lower than the local top of $0.658 on July 30, signaling a lack of demand. As a result, the price has dropped by 9% since the $0.644 swing high and currently stands at $0.585. This suggests that the 30% rally may soon be reversed.
A potential start-of-the-week rally could drive XRP to retest the $0.613 resistance level, but a rejection here would indicate buyer exhaustion and potentially lead to a 10% correction to the $0.560 to $0.555 support range.
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Overview of On-chain Data
On-chain data from Santiment’s Supply Distribution By Balance metric reveals that wallets holding 1 million to 10 million XRP accumulated 230 million tokens from July 17 to August 2 in anticipation of a positive outcome in the SEC vs. Ripple lawsuit, but then started selling, leading to a balance decrease of 150 million XRP. The Whale Transaction Count indicator also shows a spike in whale selling activity on August 7, aligning with the 30% price surge, further supporting the bearish outlook for XRP.
Considering the technical and on-chain data, it appears that institutional investors have been selling their XRP holdings since the conclusion of the SEC vs. Ripple lawsuit. While a short-term correction is expected, a potential upward movement in Bitcoin price could reverse this trend.
In such a scenario, buyers may be re-engaged, pushing XRP above the critical $0.613 resistance level. This could attract bullish momentum and potentially drive XRP to the next key hurdle at $0.655.
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Tolu Zach is a multifaceted professional with expertise in both crypto content creation and medical laboratory technology. With a unique blend of analytical skills and industry knowledge, Tolu navigates the complexities of cryptocurrency while maintaining a pivotal role in healthcare. Trusted for insightful analysis and accurate diagnostics, Tolu excels in diverse fields.
