Skip to main content

These Metrics Are Flashing Warning Signs As XRP Approaches A Potential Bear Market Shift

XRP experienced one of its most significant rallies ever in this cycle, reaching a new all-time high. However, with the broader cryptocurrency market turning extremely volatile, the price of altcoin has now fallen dangerously close to the $1 mark. Despite the notable decline, on-chain metrics suggest that the altcoin could still be set for more downside movement in the upcoming weeks and months.

XRP Is Facing Bear Market Threat

The XRP bloodbath has continued after falling by nearly 20% on Thursday, with the price of the altcoin now positioned at $1.22. Meanwhile, fresh data are flashing strong warning signs about a potential continuation of the current downward trend.

Advanced investment and on-chain data analytics platform, Alphractal, has outlined a growing cluster of on-chain and market metrics, which suggests that XRP may be approaching the edge of an aggressive bear market phase. Liquidity, holder behavior, and derivatives positioning indicators are starting to line up in a manner that has historically preceded more dramatic declines.

Specifically, 3 different key metrics are hinting at this impending bear market phase for the leading altcoin. These metrics include the Realized Cap Impulse, the MVRV Z-Score, and the Net Unrealized Profit and Loss (NUPL).

Currently, data from Realized Cap Impulse shows that new capital is flowing out of XRP. As for the MVRV Z-Score, which is sitting right on a key level, the metric hints at either a bear market continuation or the last on-chain support. Meanwhile, the NUPL is also at its transition line, and a further drop implies that most XRP activity will shift into unrealized losses.

XRP

XRP is now sitting exactly at a critical on-chain transition point. In other words, the altcoin is in a fragile state. If the price declines a little more, the data suggests conditions could deteriorate fast, paving the way for an extended bear market and potential capitulation phase.

Alphractal also highlighted that if the 3 metrics display extended weakness, the ongoing selling pressure will probably increase in the upcoming days. Thus, this makes the moment a crucial one for monitoring and for making data-driven decisions in order to position ahead of possible upside or downside moves.

Short-Term Holders Are The Major Sellers

XRP’s current downtrend is not entirely a surprise, given the growing selling pressure from its holders. Steph is Crypto, a market analyst and trader, disclosed that the renewed selling activity is emerging from the short-term holders, who appear to be the primary source of distribution.

Data shows that wallet addresses aged between 1 week and 1 month have experienced a drop from 5.27% to 3.6% in the past few days. Meanwhile, wallet addresses that fall under the 1-month to 3-month category are down from 11.53% to 9.29%. When newer market players are offloading their positions in volatile conditions, it is often caused by weak conviction in the altcoin and higher risk tolerance.

While these short-term holders are constantly selling their coins, Steph is Crypto highlighted that long-term holders are doing the opposite. These investors are not selling and are holding on to their coins. For now, only weak hands are the ones that are selling in the market.

XRP

from Bitcoinist.com https://ift.tt/iALdTBh
Labels:

Comments

Post a Comment

Popular posts from this blog

Dogecoin Sees 47% Spike In Active Addresses, Why Price Could Follow Suit

Dogecoin has witnessed a massive spike in its active addresses , providing a bullish outlook for the foremost meme coin. Based on this development, the DOGE price could also witness a bullish reversal soon enough as it reclaims key support levels.  Dogecoin Records 47% Spike In Active Addresses In an X post , crypto analyst Ali Martinez stated that Dogecoin’s network activity is picking up. This came as he revealed that active addresses have jumped 47% in the past month, rising from 110,000 to 163,000. This development is bullish as it indicates more users are using the network.  This could help spark a significant rally in the Dogecoin price, as a surge in active addresses indicates that DOGE’s utility is on the rise. Another onchain metric which paints a bullish picture for the meme coin and hints at a reversal is the increase in new addresses. In another X post, Martinez revealed that Dogecoin’s new addresses have doubled in the past month, climbing from 16,400 to 34,6...
Post a Comment
Read more

Bitcoin ETFs Post Second Straight Week Of $500 Million Outflow — Details

The US-based spot Bitcoin ETFs (exchange-traded funds) recorded their second consecutive week of significant outflows over the last five-day trading period. This recent run of disappointing performances reflects the ongoing shift in investor sentiment in the United States. Over the past year, strong inflows into the US Bitcoin ETF market have constantly been associated with positive action for the BTC price. Fittingly, the price of Bitcoin has been consolidating over the past few weeks, struggling to pick up any real momentum. Bitcoin ETFs Record Fourth Consecutive Outflow Day According to the latest market data , the US Bitcoin ETFs registered a total daily outflow of $62.77 million on Friday, February 21. This latest round of withdrawals marked the fourth straight day (and the eighth day in the last nine trading days) that the crypto-based products would witness a net capital outflow. The Grayscale Bitcoin Trust (with the ticker GBTC) accounted for a larger percentage of Friday’...
Post a Comment
Read more

Bank of Russia Proposes Limited Crypto Trading for Select Investors

The Bank of Russia has put forward a new proposal that could mark a significant shift in the country’s approach to cryptocurrency regulation. Earlier today, the central bank announced that it has submitted a proposal to the Russian government to discuss allowing a limited group of investors to buy and sell cryptocurrencies such as Bitcoin. The proposal suggests implementing a three-year experimental regime where only qualified investors with at least $1.1 million in securities and deposits would be permitted to engage in crypto trading. This move is part of ongoing efforts to define Russia’s digital currency policies, which have historically shifted between strict regulations and cautious acceptance. Despite considering this controlled legalization for select investors, the Bank of Russia maintains its stance against using cryptocurrency as a payment method. The institution has also recommended introducing penalties for those who violate the terms of the experimental regime, rein...
Post a Comment
Read more