A cryptocurrency analyst has explained how XRP could be at risk of a drop toward $0.80 based on the data of some on-chain indicators.
XRP Has Seen Bearish Developments In On-Chain Data
In a new thread on X, analyst Ali Martinez has talked about why XRP may be at risk of seeing a decline to the $0.80 level. “First, network activity has cooled sharply,” noted Martinez. There are many ways to gauge network activity, but the analyst has used the Active Addresses on-chain indicator.
This metric keeps track of the total number of addresses that are taking part in some kind of transaction activity on the blockchain every day. A chart shared by the analyst earlier showed a drawdown in this metric for XRP.
Generally, a decline in the metric is a sign of a drop in interest around the asset. “Daily active addresses have fallen to roughly 38,500, pointing to fading participation and interest,” said Martinez.
Another on-chain indicator has also shown a development recently: the supply held by the whales. Whales refer to the big-money investors of the market who carry significant amounts in their wallets.
As the below chart shows, these investors participated in selling of about 40 million tokens recently.
Due to the massive size of their holdings, whales are considered to be influential entities on the network, so their behavior could be relevant for the cryptocurrency. As these massive hands have been selling on the XRP blockchain recently, it’s possible that the coin could feel a bearish effect. If nothing else, the trend reflects that the asset’s key investors are showing weaker confidence.
Finally, the analyst has shared a chart for the cryptocurrency’s UTXO Realized Price Distribution (URPD). This indicator basically tells us about the amount of supply that investors last purchased at the various price levels that the coin has visited in its history.
From the chart, it’s visible that a notable amount of supply has its cost basis at the $1.77 level, which isn’t too far below the current XRP spot price. It’s possible that if the asset retests this level, these investors who purchased there could show some kind of reaction.
When the market mood is bullish, this reaction tends to be dominated by buying. Given the current sentiment in the digital asset sector, however, the support may not be sufficient. “If selling pressure continues, XRP risks losing the $1.77 support,” explained Martinez. “A breakdown there opens the door to the next major support zone near $0.80.”
This support zone near $0.80 is currently the largest demand zone beyond the $1.77 level.
XRP Price
At the time of writing, XRP is floating around $1.86, unchanged from one week ago.
Source: https://www.newsbtc.com/xrp-news/xrp-risk-drop-to-0-80-analyst-makes-case/
