Ripple’s native token, XRP, has witnessed a notable price surge of over 7% within the past 24 hours. Despite this increase, market analysts caution that such movements might merely represent a “dead cat bounce,” a term used to describe temporary recoveries during broader declines. Concurrently, on-chain data points to a continuous drop in demand for XRP, coupled with a trend of investors selling for short-term profits.
What Does the Data Say?
The recent price movement labeled as a “dead cat bounce” suggests a brief resurgence following a significant decline. XRP hit a 30-day low of $0.43 on Monday before bouncing back by 12% in the subsequent 24 hours. However, both on-chain metrics and daily price charts hint that XRP might resume its downward trajectory.
The divergence between price and daily active addresses (DAA) has also been noteworthy. This metric, which compares asset price movements with the activity levels on the network, shows a negative divergence for XRP. Such data can help investors understand if network activity is in sync with price trends.
Is the Rally Sustainable?
Current calculations reveal a -51.65% price DAA deviation for XRP. A negative deviation during a price rise typically indicates weak or unsustainable rallies, as network activity fails to keep up with the price spike.
If the selling pressure on XRP continues to mount, the gains seen today could be erased, leading the price to potentially drop to $0.46. Conversely, sustained buying could push the price up to $0.52. Presently, XRP’s price stands at $0.5146.
Key Takeaways
– Ripple’s XRP experienced a significant 7% price increase in the last 24 hours.
– Some analysts view this spike as a typical “dead cat bounce.”
– On-chain data indicates a decline in demand and a propensity for investors to take profits.
– Negative price DAA deviation suggests a weak and unsustainable rally.
– Future price movements could see XRP dropping to $0.46 or rising to $0.52, depending on market dynamics.
In conclusion, while Ripple’s XRP has seen a short-term price increase, caution is warranted. The ongoing trends in on-chain data and investor behavior suggest potential vulnerabilities that could influence the token’s future performance.
