On the bright side, the weekly weighted sentiment behind XRP was positive again.
- XRP saw a shift in the weighted sentiment that could help the bulls gain traction The asset was undervalued but organic demand and user activity were also in decline
Ripple [XRP] was recently classified as a “zombie token” and criticized for being overvalued. The 27th of April also saw sizeable XRP outflow from exchanges, hinting at accumulation.
Yet, the price of the token continued to trend downward. Analysis showed that key on-chain metrics were in decline. Can the buyers hold off another wave of selling?
Growth metrics continued their descent
Source: Santiment
The velocity of XRP has trended downward since mid-March. This metric measures the average number of times a single token has changed wallet each day. The higher the number, the more transactions the token was involved in within a set time frame.
The decline suggested that the user activity and transactions were reducing in number. The network growth, which measures the number of new addresses being created on the network each day, has also trended downward.
Together they indicated that the demand for the token from new users has slowed, and transaction activity has also faltered alongside prices. The ratio of transaction volume in profit was also dropping after marking the local top at $0.57 on the 22nd of April.
What are the chances of a recovery?
Source: Santiment
The 30-day MVRV ratio was negative in the past two weeks. It showed that the asset was deeply undervalued in the short-term. However, the mean dollar invested age has only begun to trend higher over the past ten days.
It would need to higher for weeks or months together to give XRP bulls the strength to drive a rally past $0.7, the HTF resistance.
On the bright side, the weekly weighted sentiment behind XRP was positive again. Additionally, the dormant circulation was also muted in the past two weeks.
It did not see a sizeable spike, which indicated that a large wave of selling might not be upon us yet.
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