Ripple (XRP) closed below its 20-day EMA for the fourth day, signaling a bearish trend and potential continuation of its seven-day price decline.
Ripple (XRP) closed for the fourth consecutive day below its 20-day exponential moving average (EMA) on May 31, potentially prolonging a seven-day price decline.
A token’s price falling below its 20-day moving average is an indication of a pessimistic trend, as it signifies that the token is trading below this significant moving average. Investors may interpret this as evidence that the market is transitioning in the direction of selling.
An analysis of several significant technical indicators for XRP validated the likelihood that the alternative cryptocurrency might experience a decline in value in the days ahead.
At the time of writing, for instance, critical momentum indicators were below their neutral points. The money flow index (MFI) for XRP was 40.96, while the relative strength index (RSI) was 46.64.
In conjunction with the aforementioned indicators, these values demonstrate a decline in XRP demand, as market participants would rather distribute their existing holdings than purchase new tokens.
The decrease in active addresses on the XRP blockchain confirmed the escalating selling pressure. The number of daily active addresses, as measured by XRP’s 30-day moving average, experienced a decline of 30% in the previous month, as reported by Santiment.
During the same period, the daily volume of newly generated addresses for altcoin transactions decreased by 29%. It is worth noting that a decline in the number of active and new addresses associated with a particular token frequently indicates the possibility of its price decline.
Consistent with the decline in demand and price of the alternative cryptocurrency, day traders accumulated profits. The daily transaction volume of XRP resulted in a 1.16 profit-to-loss ratio.
This could suggest that XRP investors gained a profit from 1.16 transactions for every loss-making transaction that occurred during the period under consideration. A buy signal was generated by XRP’s negative market value/realized value (MVRV) ratio for investors seeking to trade against the market.
As of the time of writing, XRP’s MVRV ratios for its 30-day and 365-day moving averages were -0.7% and -8.5%, respectively, as reported by the cryptocurrency analytics firm Santiment. This metric monitors the proportion between the present market value of a token and the mean price at which it was acquired, excluding tokens.
