Ripple (XRP) is currently experiencing a gradual uptrend, aiming to close above $0.56. However, this momentum may not last, as the cryptocurrency encounters potential obstacles that could lead to a temporary decline.
Shaken Conviction Among Long-term Holders
The actions of Ripple’s long-term holders (LTHs) significantly influence the token’s price. Typically, their accumulation drives prices up, while their selling triggers deep drawdowns. Recently, the “age consumed” metric has shown spikes, indicating that long-term investors are moving their holdings around, deviating from their usual pattern. This behavior suggests skepticism among XRP LTHs. They might be securing profits or offsetting losses in the current market conditions. Consequently, this shift could potentially trigger a bearish impact on XRP’s price.
Declining Participation: A Negative Sign
Additionally, the total participation of XRP holders has been steadily declining. The number of active addresses conducting transactions on the network started decreasing in December 2023 and continues to do so. This drop in active addresses indicates a decline in overall participation, a bearish sign for the cryptocurrency.
Potential Price Dip to Key Support
Given these factors, XRP’s current uptrend may be poised for a pause. The token is trading at $0.53, securing the 23.6% Fibonacci Retracement level as support, also known as the bear market support floor. If the issues mentioned trigger a decline, XRP’s price could fall back to this key support level of $0.51. Losing this support would break the uptrend line, potentially sending the altcoin further down to $0.50 or below.
Invalidating the Bearish Thesis
However, if broader market conditions remain favorable, XRP’s price could avoid a significant drawdown and continue its rise towards the $0.56 target. In such a scenario, the bearish thesis would be invalidated, allowing the token to maintain its upward trajectory.
The crypto community will closely monitor Ripple (XRP) developments and price movements, as a potential pause in the uptrend could have wider implications for the altcoin’s future performance.
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