- XRP erased some of its losses, but data suggests it may not be enough.
- Some traders bought the dip, but the shorter EMA indicated a downtrend.
After falling from $0.59 to $0.43 between April 13 and 17, the price of XRP was retested and broke the psychological resistance of $0.50 on April 18.
In fact, at the time of writing, the value of the altcoin rose 5% in 24 hours to $0.51, thanks to the Bitcoin halving. Although this is cause for optimism, on-chain data shows that the recovery may be short-lived. To assess this contention, AMBCrypto looked at the supply distribution of XRP.
Token in trouble
According to data from Santiment, the number of addresses holding between 100 and 1 million tokens has decreased significantly compared to figures from a few weeks ago.
For example, the number of XRP holders owning 100,000 to 1 million tokens was approximately 31,000 as of March. But at press time, that was no longer the case. In the past, people holding between 100 and 1,000 XRP were closer to 731,000. That figure has also declined, falling to 718,000 at press time.
Source: Santiment
Scenarios like this mean that some parts of the military no longer want to be part of the military. This decline in confidence may make it difficult for XRP to revisit its previous highs around $0.72.
Apart from these conditions, another factor that could hinder the cryptocurrency’s rise is the lawsuit filed by Ripple against the SEC. According to an update on the ongoing litigation, Ripple will respond to the relief brief on April 22.
There may not be a ruling that day, but the emotion shown by the judge could impact the price of XRP. If the perception shown by the judges is in favor of the token, XRP may remain above $0.50. However, if regulators gain the upper hand, cryptocurrency prices could fall below critical levels.
This could be accelerated by the fact that XRP is close to overbought on the charts.
What do the indicators say?
This is expressed as the Stochastic Relative Strength Index (Stoch RSI). If the indicator crosses 80, the price may retrace as the reading generates a sell signal.
However, Accumulation/Distribution (A/D) is rising, indicating that traders have been buying the previous decline. If buying pressure increases and distribution fails to outpace accumulation, XRP could rise on the charts.
On the other hand, increased selling pressure could trigger a massive downtrend that could push the token price down to $0.45. It is worth noting here that the exponential moving average (EMA) has also sent a bearish signal.
Source: TradingView
This is because the 9 EMA (blue) and 20 EMA (yellow) were at approximately the same point. However, the price of XRP fell below both indicators, suggesting further declines.
Additionally, the token realization limit has been reduced to 147.56 million. In a bull market, an upward trend in realized caps indicates increased realized profits for market participants who bought cheaper.
Source: Santiment
Realistic or not, the XRP market cap in terms of BTC is:
So a decrease means more realized losses. Therefore, unless other participants price it low again, XRP may feature another downtrend.