Ripple’s XRP token has been experiencing relatively muted performance in recent months, despite several events that would typically cause positive price movements. This can be attributed to XRP’s strong correlation with Bitcoin, which has limited its reaction to major updates.
For example, news that Donald Trump raised campaign donations through digital tokens, including XRP, did not impact the token’s price. Similarly, the transfer of 33 million XRP tokens to a Binance wallet had no effect. Even the announcement of plans to introduce smart contracts to the XRP Ledger resulted in a 3% drop in XRP’s price.
The strong correlation between XRP and Bitcoin, with a coefficient of 0.72, means that XRP’s price movements are heavily influenced by Bitcoin’s performance. In the past 24 hours, as Bitcoin’s price dropped by 4%, XRP followed with a 3% decline. This negative divergence in trading volume indicates increasing selling pressure, suggesting further decline for XRP.
Furthermore, XRP’s negative price-to-daily active address divergence confirms the increase in selling activity. This metric shows a reduced participation in buying, selling, or holding XRP, contributing to continued price pressure.
Currently, XRP is trading at $0.55, with its 12-hour chart suggesting further decline. The bearish MACD line and the dominance of sellers indicated by the Elder-Ray Index reinforce this outlook. If the bearish trend continues, XRP’s price could drop to $0.52, and further decline to $0.46 is possible if support levels are breached. However, a shift in market sentiment towards bullishness could push XRP’s price up to $0.56.