Can the XRP Price Hold Its High Amid Declining Network Activity
The value of Ripple’s XRP has surged over the past week, adding $19 billion to its market capitalization. It is currently trading at $2.37, up 16% in the past seven days.
However, BeInCrypto’s assessment of its on-chain data suggests that the rally may have been driven primarily by speculative trading activity. New demand for XRP dropped significantly during the period under review, putting its price at risk of reversing its current upward trend.
Falling number of new Ripple addresses highlights lack of new demand
According to data from Santiment, the number of new addresses per day Created for trading XRP It has plunged 32% in the past seven days. Interestingly, the coin’s price has increased by double digits during this period.
When the price of an asset increases but its number of new addresses decreases, it indicates that the price increase is being driven more by speculative traders rather than new players entering the market. This points to a lack of new demand for the asset, suggesting the speculative rally may not be sustained.
In addition, the decline The XRP network has realized profits and losses Supporting this bearish outlook. Since climbing to $1 billion on January 1, the metric has lost 99% in value, according to Santiment. As of press time, the figure was $10.48 million.
A token’s Network Realized Profit/Loss measures the difference between the last price an asset was moved or sold for and the current market price. It tells us how much profit or loss was “realized” by users on the network.
When prices fall during a period of rising prices, it indicates that the market is speculative or illiquid and holders are not actively selling. This could be because they expect prices to rise further or are hesitant to realize gains. However, the trend suggests that the price surge is not supported by strong market participation. This suggests that the price increase is unsustainable as it is not accompanied by high demand for the asset.
XRP Price Prediction: Can Rise Hold Amid Low Demand??
As of press time, XRP is trading at $2.37. The coin’s 16% gain over the past week has pushed its price above the upper limit of the descending parallel channel.
However, due to lower demand for XRP, it may struggle to sustain these gains and could reverse the trend. In this case, the price may fall back inside the channel towards the $1.88 support.
Conversely, a surge in buying activity would invalidate this bearish outlook. In that scenario, XRP price could extend gains and regained multi-year highs of $2.90.
Disclaimer
conform to trust project Guide, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to providing accurate and unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult a professional before making any financial decisions. Please note that our terms and Conditions, privacy policyand Disclaimer Updated.
