Ripple (XRP) holders have recorded gains in the past week after the altcoin defied expectations and rose in value. This positive trend follows the US Securities and Exchange Commission (SEC) abruptly canceling a meeting with Ripple.
The token initially dipped slightly after news of the canceled meeting but quickly rebounded. Since then, XRP’s price has rallied by 20%.
Ripple Holders “Smile To the Bank”
An assessment of XRP’s ratio of daily transaction volume in profit to loss (using a seven-day moving average) shows that token holders have seen more profit than losses in the past seven days. As of this writing, the metric’s value is 2.
This on-chain metric measures the proportion of profitable transactions compared to those that result in losses over a given period.
When the ratio is above one, it indicates that the volume of profitable transactions exceeds that of loss-making transactions. This suggests that more traders are selling at a profit, which is generally a bullish signal and indicates a positive market sentiment. Conversely, a negative ratio suggests that more traders sell at a loss. This is a bearish signal.
At 2, XRP’s ratio of daily transaction volume in profit to loss shows that its holders have logged more profits than losses due to the past week’s price rally.
However, this trend may soon change. This is because of the gradual decline in the demand backing XRP’s current rally, as gleaned from its negative Price Daily Active Address (DAA) Divergence.
Read More: How To Buy XRP and Everything You Need To Know
This metric compares an asset’s price movements with the changes in its number of daily active addresses. Investors use it to track whether the price movements are supported by corresponding network activity.
At press time, the value of XRP’s Price DAA Divergence is -82.05%. This negative divergence suggests that XRP’s price is moving significantly against the average daily trading activity.
A large negative divergence like this signals that the downtrend is gaining momentum. Even though the asset’s price may be rising, there is less buying pressure to sustain the rally.
XRP Price Prediction: The Bulls May Defend Price in the Short Term
While the buying pressure sustaining XRP’s price rally may be dwindling, the positive bias toward the altcoin remains high.
A notable indicator of this is the token’s Elder-Ray Index, which returns green histogram bars at press time. XRP’s Elder-Ray Index is 0.08
This indicator measures the relationship between the strength of buyers and sellers in the market. When its value is positive, bull power is dominant in the market.
If the bulls remain in market control, the demand backing XRP’s price rally may surge. Should this happen, the altcoin will rally to exchange hands at a multi-month high of $0.66.
Read More: Ripple (XRP) Price Prediction 2024/2025/2030
However, the above bullish thesis is invalidated if selling pressure mounts, as the token’s price will plummet to $0.56.
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