Ripple (XRP) has once again surged to become the fourth largest cryptocurrency by market capitalization, displacing Binance Coin (BNB) with a market cap of $37.39 billion. The rally in XRP’s market cap followed Judge Analisa Torress’ ruling, which declared that Ripple’s sale of XRP tokens in 2020 did not qualify as the sale of an “unregistered security.” This ruling boosted investor confidence in XRP, leading to a surge in trading volume for the altcoin.
Since the ruling on July 13th, XRP’s value has increased by an impressive 51%, currently trading at $0.7097. However, a closer look at the daily chart indicates that a correction may be on the horizon. The Moving Average Convergence/Divergence indicator (MACD) on the D1 chart shows that XRP entered a new bear cycle on July 25th, with the MACD line crossing below the signal line, signaling a bearish trend.
Negative sentiment is evident as the MACD histogram bars are below the zero-line on the daily chart. The Money Flow Index (MFI) also indicates a decline in buying momentum, resting below the center line at 39.19, suggesting that more traders are selling to book profits.
Other momentum indicators, such as the Relative Strength Index (RSI) and the Chaikin Money Flow (CMF), are also in a downtrend, indicating a decrease in buying pressure. On-chain data analysis reveals a decline in the number of daily active addresses and new demand for XRP since mid-July, indicating reduced interest and activity in the token.
Furthermore, the profitability of XRP trades has been affected, with data showing that in the last week, the ratio of daily transactions in loss has exceeded those in profit. These bearish signals suggest that a correction may be imminent for XRP’s recent rally. Traders and investors are advised to closely monitor the market dynamics to make informed decisions in this volatile environment.
