The price of XRP is facing the possibility of testing a negative trend and dropping below $0.47. Despite this, there are optimistic indicators that suggest investor confidence. XRP had a successful week, with its price increasing by over 2%. However, a bearish pattern has emerged on the token’s chart, leading to decreased volatility and a slow-moving price action that may be a precursor to a downward movement.
According to CoinMarketCap data, the momentum of XRP has slightly decreased, with the price experiencing minimal changes in the past 24 hours. Currently, XRP is the seventh-largest cryptocurrency with a market capitalization of approximately $29.3 billion. Although the price has slightly decreased to $0.5227 in the last 24 hours, it has increased by 2.2% over the previous week.
In mid-April, when XRP experienced a significant price decline, a bearish pennant pattern formed. The price of the token has since consolidated within this pattern. If XRP tests this pattern, it could quickly turn negative and fall below the lower trendline, resulting in a further decrease in price.
Last week, Santiment’s data showed multiple spikes in the exchange inflow of XRP, indicating strong selling pressure and investor dumping of the asset. Additionally, on May 24, XRP’s NVT ratio significantly increased, suggesting that the coin may be overpriced. Typically, an overvalued asset indicates a potential price decline. The MVRV ratio has also recently fallen, further contributing to the pessimistic outlook.
Despite these negative signs, there are several promising indicators. The weighted sentiment of the token has risen, indicating that investors remain optimistic and the market sentiment is bullish. Coinglass data shows that the long/short ratio of XRP has increased in the past 12 hours, which is a positive sign and suggests that investors are more inclined to buy the asset.
To determine if XRP is likely to turn bearish, let’s analyze its daily chart. Following a decline, the Chaikin Money Flow (CMF) has increased, indicating a potential upward movement. Additionally, the Money Flow Index (MFI) is trending upwards, suggesting that prices may continue to rise.
If these signals prove reliable, XRP may maintain its bullish stance and avoid testing the bearish pennant formation. In this case, the price of XRP could initially reach $0.544. However, if XRP tests the bearish trend, it may fall to $0.47 in the coming days.
On another note, Ripple Whale has moved 50 million XRP to centralized exchanges following the passage of the FIT21 bill, as previously reported by CNF.
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