Ripple’s XRP token shows signs of weakness as its price slips below the ascending trendline, signaling a possible bearish shift in the cryptocurrency market. The token, which had been trading within a rising pattern since July, faced a sharp breakdown on October 2, prompting concerns among traders and investors. The price decline, paired with specific on-chain data, highlights the possibility of further downward movement for this altcoin.
Bearish Signals Take Hold
XRP’s price, now hovering around $0.5329, continues to trade in a tight range after failing to break past crucial resistance levels. Notably, the cryptocurrency was rejected from its daily resistance level of $0.544 earlier this week, intensifying concerns of a further decline.
Moreover, the token’s price currently sits below the 200-day EMA, which has become a resistance point. If the cryptocurrency fails to recover above this critical threshold of $0.544, it could face a further downturn, possibly dropping by as much as 18% to retest its August 5 low of $0.432.
Adding to this bearish scenario, the MACD indicator on the daily chart has confirmed a bearish crossover since October 2. This technical signal, combined with red histograms below the neutral level, suggests that downward momentum remains strong and firmly in control of the token’s short-term trajectory.
On-Chain Data Reflects Growing Investor Concerns
In tandem with technical signals, on-chain data paints a grim picture for XRP holders. One of the more concerning metrics is the Network Realized Profit/Loss (NPL) indicator, which spiked from September 30 to October 1.
This rise, from 13.24 million to 146.09 million, suggests that XRP holders were aggressively selling their tokens at a profit, further increasing downward pressure on the price. Such a spike in NPL is often interpreted as a sign of market panic, with investors booking profits en masse, potentially leading to a sell-off.
Moreover, daily trading volumes have decreased sharply, highlighting a waning interest in the token. From October 2 through the weekend, the altcoin’s daily trading volume plummeted from $3.13 billion to just $704.78 million—the lowest level recorded since early September. This decline in volume signals a potential liquidity crunch, further limiting XRP’s upside potential and making it harder for the price to recover in the near term.
XRP’s Future Outlook
Looking ahead, XRP remains below the 50-day and 200-day EMAs, which continue to signal bearish momentum. Traders and investors alike will closely watch for any movement around the $0.535 level, as a break above could push the cryptocurrency back toward the $0.55 mark, with the potential to reach $0.66 if further gains are made.
Nevertheless, failure to reclaim these levels could send the altcoin further down, with support possibly forming near the $0.50 mark. With the RSI for XRP at 39.93, there is room for the token to decline further before reaching oversold territory. However, much of the cryptocurrency’s near-term price action will depend on external factors such as regulatory updates, market sentiment, and overall demand within the cryptocurrency space.
Also Read: Ripple: When Will XRP Price Recover To Hit $1?
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