Ripple (XRP) price has remained rooted below $0.55 as it struggles to reclaim losses from the August 17 crypto market downturn. A vital on-chain indicator highlights the prevailing bearish momentum as the main factor hindering the XRP price breakout.
Ripple price rejected the $0.55 resistance level as the bears rebuffed an early rebound attempt. But despite recent price woes, key on-chain indicators reveal that XRP network activity has remained steady.
Amid Bearish Headwinds, XRP is Currently Undervalued
According to on-chain data, the prevailing bearish sentiment across the crypto market is one of the key drivers preventing XRP price breakout. Santiment’s Network Value to Transaction Volume (NVT) ratio assesses underlying transactional activity on a blockchain network relative to recent price performance.
As depicted below, the XRP NVT ratio has increased by a staggering 340% from 51.66 to 226 between August 18 and August 24.
Concisely put, when the NVT ratio rises, as observed above, it indicates a steady growth in underlying economic activity relative to the price downtrend. Logically, this suggests that external factors such as bearish market speculation are currently responsible for driving XRP price downward.
XRP’s current undervalued status puts it in a prime position to score significant gains once the market sentiment flips bullish.
Long-Term Investors Are Holding Out for a Momentum Swing
With current low prices now looking unfavorable, many Ripple longer-term partners and strategic investors are now HODLing.
Indicatively, after a noticeable blip during last week’s market crash, XRP Mean Coin Age had dipped toward 34.33. But as of August 24, it has now rebounded to 38.30, representing a 10% increase.
The Mean Coin Age data is a critical measure of the overall sentiment among long-term investors. It is derived by estimating the average number of days coins in circulation have been unmoved from their current wallet addresses.
The 10% uptrend in XRP Mean Coin Age indicates that many XRP holders are growing increasingly unwilling to sell at the current prices. If they keep HODLing for a better bargain, the drop in sell pressure could trigger a significant XRP price breakout.
XRP Price Prediction: Possible 20% Rebound
If transactional activity intensifies and the long-term investors continue to HODL, XRP price enter a 20% upswing. The Market Value to Reallized Value (MVRV) ratio, which gauges the net financial position of current holders, also validates this prediction.
With prices currently sitting at $0.52, most crypto investors who bought XRP within the past month will make 15.70% losses if they sell today.
Historical patterns suggest XRP investors could hold out for around 5% gains. But if they close their positions before breaking even, XRP could face significant resistance at the $0.60 territory.
Conversely, the bears could remain in control if the XRP price drops below $0.45. As seen during the last price crash on August 17, many investors were unwilling to book profits greater than 25%. Hence, they could cut their losses and stop selling around the $0.48 range.
But if that support level cannot hold, XRP could reverse below $0.40.
In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.