$XRP Price Under Pressure as Demand Declines and Indicators Signal Bearish Trends

Ripple (XRP) has been experiencing a seven-day price decline, closing below its 20-day exponential moving average (EMA) for four consecutive days as of May 31. Trading below this average is a bearish signal, indicating a shift towards sell-offs.

1. Decline in Demand for XRP

Key technical indicators suggest that XRP might continue losing value. The Relative Strength Index (RSI) is at 46.64, and the Money Flow Index (MFI) is at 40.96, both below their neutral points, indicating a decline in demand as market participants are more inclined to sell rather than buy.

1. On-Chain Activity Decline

Santiment’s data shows a 30% decrease in daily active addresses over the past month, along with a 29% drop in new addresses created to trade XRP. Such declines in active and new addresses often precede price drops.

1. Profit Despite Declining Price

Interestingly, despite the declining demand and price, daily traders have continued to record profits. The ratio of transaction volume in profit to loss stands at 1.16, meaning for every loss-making transaction, there are 1.16 profitable transactions.

1. MVRV Ratio Signals a Buying Opportunity

XRP’s Market Value to Realised Value (MVRV) ratio on 30-day and 365-day moving averages are -0.7% and -8.5% respectively, indicating that XRP is currently undervalued. This suggests a potential buying opportunity as the asset is trading at a discount relative to its historical cost basis.

Overall, while XRP shows signs of bearish trends with decreasing demand and on-chain activity, its undervalued status might present a strategic buying opportunity for traders.