XRP price is in a steady downtrend with lower lows represented by a downtrend line. However, this correction can be a blessing in disguise as it likely represents a buying opportunity, allowing investors to build positions for a quick profit.
XRP price remained below the downtrend line for almost 3 weeks and shows no signs of recovery in the near future. While this move is likely bearish in the near-term, it could also be an opportunity for sideline buyers given its proximity to stable support.
This trend will continue to push XRP to retest the 12-hour demand zone, which lasts between $0.56 and $0.63. Accordingly, interested buyers can try to collect XRP at a low price.
A resurgence of buyers here is likely to propel the price above the downtrend line and find its way to the $0.85 resistance hurdle. This move should yield a 35% gain and XRP is more likely to surge above it to gather liquidity.
The above forecast is supported by the drop in the number of daily active addresses interacting with the Ripple blockchain from 163,650 to 92,228 on January 27th. This 43% drop shows that investors are not interested in XRP at current prices.
Source: Santiment
While the above on-chain metric suggests that prices could be falling, the 365-day Market-to-True-Value (MVRV) pattern signals that an uptrend is near.
The 365-day MVRV is used to find the average profit/loss of investors who have bought XRP in the past year. Currently, the MVRV is hovering around -14.5%, showing that short-term holders are selling at a loss. This is an accumulation opportunity for long-term investors.
Therefore, market participants can expect that the XRP price will see some significant upward momentum soon.
Source: Santiment
On the other hand, if the 6-hour candle closes below $0.56, the bullish argument will fall. In this case, the remittance token may drop lower to find stable support.
Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
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