The Ripple network registers an unprecedented level of user activity. A breakout of the critical resistance level of $0.50 could gain further traction
The price of Ripple (XRP) is up 20% from its recent local low of May 11. The Ripple Ledger network seems to be attracting an unprecedented level of user activity.
Will the bulls look for further gains after crossing a critical resistance level of $0.50?
The Ripple Ripple (XRP) native token broke through critical resistance at $0.50 for the first time since April 19. XRP has been on an uptrend since May 11, after rebounding from a recent low of $0.42.
However, the current rally has picked up a bit as Ripple’s network activity rose more than 2,600% on May 27.
In the light of the current rally, however, the token’s activity has increased by more than 2,600%.
With social sentiment still remaining negative, does the token have the potential for further growth?
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Ripple network activity soars 2,600%
According to Santiment, the XRP network recorded its second-highest volume of user activity ever this week.
Between May 26 and May 29, the number of intraday active XRP addresses increased from 18,090 to 490,350.
This represents a 2,600% jump in daily user activity.
Daily Active XRP Addresses.
The Daily Active Addresses metric measures the number of unique wallet addresses interacting on the network on a given day.
Sustainable growth, as seen in the chart above, indicates increased demand for the network’s services. Apparently, that has put some upward pressure on XRP over the past few days.
It is notable that the last time there was such a surge in XRP network activity was on March 19, 2023. XRP’s price was up more than 42% in 10 days then.
This time, Ripple has performed well, maintaining that level of network activity for three days in a row.
With Ripple performing better this time, maintaining that level of network activity for 3 days in a row, coin hoarders can expect the price to rise further in the coming weeks.
The hype on social platforms hasn’t started yet
Despite a 20% increase in price over the past 20 days and recent spikes in user activity, the aggregate social perception of Ripple coins remains largely negative.
The sentiment score, which measures the ratio of positive to negative mentions, currently shows that many community members remain pessimistic.
In the chart below, you can see that this index has shown an upward trend since May 27.
However, at the close of May 29 it was still deep in the negative zone, around -0.3.
Social Sentiment Index for XRP.
When weighted sentiment trends below zero, as shown in the chart above, it means that many market participants have not yet become buyers of the current rally.
Strategic investors may interpret this as an indication that the price of XRP could still gain additional momentum before reaching a euphoric peak.
And finally, other investors may succumb to FOMO’s influence if Ripple continues to maintain this high level of network activity. Ultimately, this could take the XRP rally to a new round.
Will XRP Attack the $0.60 Barrier
The majority of crypto investors who bought XRP over the past month are now in the profit zone (around 9%), according to Santiment and onchain metrics (Market-Value to Realized-Value, MVRV).
This indicator calculates the ratio of market and realized value of the coin. Values above one indicate a higher market capitalization.
Historical trading patterns show that the last time XRP reached this level of bullish momentum, investors gained 26% before selling.
That means XRP could potentially move closer to $0.59 before encountering significant resistance.
But in order for XRP to reach its target of $0.60, it would need to first overcome a wall of selling set up by hodlers looking to lock in a 10% profit.
But in order for XRP to reach the $0.60 target, it must first overcome the wall of selling set up by hodlers seeking to lock in a 10% profit at $0.51.
Ripple and MVRV.
And conversely, bears can still derail the bullish sentiment if Ripple unexpectedly dips below $0.45.
Many investors, however, are likely to offer price support at that level to avoid ending up in a net loss position.
Otherwise, XRP could fall further, to the next significant support level at $0.40.