XRP Faces Rejection At Key Resistance; Here’s What On-Chain Metrics Suggest

XRP has been on a downtrend owing to a lack of demand for over a week now. The coin has retouched a multi-month low at the time of writing. Broader market weakness also remains to be blamed along with a whirlwind of regulatory roadblocks owing to SEC vs Ripple’s lawsuit.

Overall it hasn’t been a very favourable time for the altcoin. The market capitalisation of XRP has noted a 7% decline over the past 24 hours according to CoinMarketCap. The market capitalisation of the coin was $29.13 billion at the time of writing.

The global crypto market cap was at $1.85 Trillion after a fall of 1.8% over the last day. XRP’s all-time high was $3.84 and at the present market value, XRP has fallen by over 80%.

XRP Price Analysis: Four Hour Chart

XRP was priced at $0.607 at press time and it noted a decline of $6.7% over the last 24 hours. In the past week, the digital asset’s market value fell by over 17%.

The coin has been repeatedly facing rejection at the $0.700 level for a week, consistent rejection has caused the bears to take over the market.

The bulls have been driven out of the market and so buyers also have existed from the market. With each rejection, XRP experienced a sell-off. Trading volume was also seen in red which is in accordance with the falling market cap of the coin.

Immediate resistance for the coin was at $0.700 and then at $0.770. If prices plummet any further, the next support line for the coin awaited at $0.59, a level the coin last visited in the month of February 2022.

Technical Analysis

The cryptocurrency has witnessed bouts of overselling and underbuying in the last week and a half. In that duration, XRP has consistently registered falling buying strength.

Prices of the coin have remained below the 20-SMA due to the sell-off. As mentioned above, with a resurgence of buyers XRP could start to trade above the 50-SMA mark that coincides with the resistance mark of $0.770.

On the Relative Strength Index, the indicator stood below the 25-mark which marks oversold conditions in the market at the time of writing.

Related Reading | The CEO Of Ripple Says Bitcoin Tribalism Is Holding Back The Crypto Industry

Does The On-Chain Analysis Invalidate The Coin’s Bearish Thesis? We Think Not!

The developmental activity of the coin has also suffered according to the data provided by Santiment. XRP recorded an increase in developmental activity in the month of September, last year. The coin recorded a high of 69 last year.

Ever since that, XRP’s developmental activities have severely noted a decline. At the time of writing, the coin stood at 14, which goes to display that XRP has underperformed considerably in this aspect.

Regarding the social aspect of the coin, the digital asset has also lagged behind. This displayed severe bearishness on the chart, as a reason why the confidence of buyers has reflected poorly.

A fall in social dominance means that the cryptocurrency has started to lose its hype and popularity, especially during favourable times such as a bull run.

The social Dominance of the coin has declined sharply ever since December 2020. The current reading was at 1.92% which is almost a 90% decline since December 2020.

The social volume also plummeted sharply with periods of highs and lows seen on the chart. The choppy social volume is an indication of declining confidence in the coin which amounts to a bearish thesis for XRP.

Although the market seems to be in the accumulation stage, from the above-given metrics, it is safe to assume that the coin itself hasn’t witnessed too much accumulation which directly amounts to a lesser number of buyers entering the market.

Currently, to invalidate a bearish price action, the coin needs to start experiencing growth in buying strength, failing to do this XRP could be stuck at this particular price action for the foreseeable future.

Related Reading | Ripple CEO Optimistic On SEC Case, Why XRP Saw Weak Response

 Featured image from UnSplash, charts from Tradingview.com and Santiment.com