After multiple failed attempts at breaking above the $0.85 resistance, some Ripple (XRP) investors have entered profit-taking mode. As the XRP price loses momentum, can the bulls defend the $0.70 support level?
The ongoing XRP price rally appears to have lost momentum after hitting a roadblock around the $0.85 mark. On-chain indicators suggest that whale investors could soon succumb to the brewing bearish momentum.
The XRP Price Rally is Gradually Losing Steam
According to the Relative Strength Index data, the XRP price rally is set to slow down considerably in the coming days. As seen below, after racing to euphoric highs after the positive SEC ruling, the XRP RSI has dropped below the critical 70 mark, hitting 68.24 at the close of July 21.
The Relative Strength Index evaluates the strength and momentum of a price trend. When the RSI angles below the 70 level from above, it suggests the underlying asset is facing growing selling pressure and could be due for a price correction.
Strategic investors may interpret this as a signal to take bearish positions on XRP in the coming days.
Read More: Ripple (XRP) Price Prediction
Whale Investors are Taking Profits as Momentum Slows
Likewise, the growing bearish sentiment among a critical cluster of whale investors also validates the pessimistic XRP price projection.
As shown below, the cluster of XRP whales holding 10 million to 100 million XRP coins appears to have started taking some profit. Between July 18 and July 22, they offloaded 320 million coins from their wallet balances.
With the XRP price currently hovering around $0.78, the recent withdrawals are worth $250 million. Notably, historical data shows that the trading patterns of this cluster of whales have been closely correlated to price trends in recent months.
Evidently, their current selling frenzy has played a critical role in the XRP price stagnating below $0.80 in the last few days.
If retail investors grow hawkish as well, XRP price could gradually drop toward $0.70
Read More: How To Make Money in a Bear Market
XRP Price Prediction: The Bears Could Target $0.70
As the XRP price loses momentum, the bulls are unlikely to scale $0.85 resistance in the coming days.
In indication, the MVRV ratio confirms that the majority of holders that bought XRP in the last 30 days have watched their profits dwindle towards 20%. Historical data suggests that many of them could keep selling until profits drop to 10%, around $0.71
But if the bears push past that support level, XRP could drop further toward $0.65 before the bulls get to regroup.
Yet, the bulls have a relatively full chance of forcing another upswing if XRP scales the $0.85 resistance. However, profits would swell to 30% at that point, and investors could start selling to withdraw some of it.
Nevertheless, if that resistance level does not impede the rally, XRP could hit a new 2023 peak of $0.90.
Disclaimer
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