XRP price has stagnated around the $0.52 zone for the better part of the last 7 trading days. A deep dive into the underlying on-chain metrics show that XRP could soon lose the $0.50 support. How much downside can Ripple investors expect?
The recent XRP rally was fuelled by positive market sentiment and the accumulation frenzy among crypto whales. But, barely two weeks since reaching an 11-month high of $0.57, on-chain data suggest that the bears could soon be back in control.
XRP Network Growth Is in a Free Fall
Despite the recent price surge, XRP has struggled to attract new demand in the past week. According to data compiled by Santiment, the number of new addresses created on the XRP network has declined considerably since the recent local high in late March.
Between March 29 and April 17, new network entrants declined by 70%, from 3,360 to 995.
Network growth measures the rate at which new participants join a particular blockchain ecosystem. When it declines persistently during a price rally, it indicates an impending price correction, as the underlying coin could struggle to find new demand.
Likewise, in further validation of the bearish outlook, a significant whale cohort appears to have begun booking profits over the past week. Crypto whales holding balances of 10 million to 100 million XRP coins have been selling since April 12, according to Santiment.
The chart below shows that the cohort of XRP whales sold 370 million coins between April 12 and April 17.
At current market price of $0.50, the coins sold are worth approximately $185 million. And when crypto whales begin to sell huge volumes within a short period, it could spread bearish sentiment to other existing and potential investors.
In summary, considering the declining network growth, if the whales keep flooding the market with more of their 4.19 billion in coin holdings, it is only a matter of time before XRP price retraces further.
XRP Price Prediction: A Decline to $0.48 is Likely
XRP bulls have fiercely defended the $0.50 support level, but Santiment’s Market-Value to Realized-Value (MVRV) data indicates that it could soon be breached.
As things stand, most holders that bought XRP in the last 30 days are sitting on profits of about 4%. The chart below shows that they would likely keep selling until the price hits $0.49, around the 1% loss zone.
If the support level also gives when XRP could decline further toward the 6% loss range at $0.45. Here, however, the bulls could force a rebound once holders cut their losses.
Still, the bulls can negate the bearish stance of XRP price can rise above $0.55. However, many holders could look to book profits around the 8% zone and inadvertently end the rally.
But if XRP breaks that resistance, it could reach a 1-year price high at $0.60.
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