Why XRP’s recovery and rally would depend on bridging the fair value gap
XRP’s price action has kept investors and traders on the edge of their seats over the last month. The altcoin’s move from $1.9 to under $0.5 and then up to $1.35 has been a remarkable journey, to say the least.
However, at the time of writing, XRP was down by 2.5% in 24 hours and 13% in one week. Is the time to shine over for XRP after more than 100% gains over the last month? Or will the altcoin reclaim its ATH levels?
High social anticipation
The social anticipation and anxiety around XRP have been generally high. Not just due to its rank, but because the Ripple v. SEC lawsuit has been a driving factor behind the rise and fall of XRP. Before it was extended on request, the deadline for fact discovery in the same was 31 August.
This could have contributed to investors becoming anxious, with the effects of the same visible on XRP’s price action as well. While social sentiment for XRP was good, the weighted social sentiment had turned negative at the time of writing.
Where’s the price heading?
At press time, XRP’s price was showing signs of recovery. Alas, the wider price movement has been sideways. Throughout last month’s rally, XRP rose by 143%. However, it faced consolidation on 15 August, following which, its price has been volatile on lower timeframes.
Further, the RSI for XRP saw an almost vertical downtick, one highlighting strong sell-side pressure. The downward trend in the RSI made lower peaks which highlighted selling pressure taking over. In the past, the RSI has been in the overbought zone whenever XRP saw local tops.
While there is a lot of anticipation around the same, a u-turn from the overbought zone on the daily chart would mean that strong support from buyers would be needed for XRP to push up.
More consolidation in store
While there is a strong chance XRP might reclaim the levels above $1.3, it didn’t seem likely in the near future. In fact, XRP could see a prolonged consolidation phase before making a move up.
What’s more, even though active addresses have seen consistent growth throughout the month, the MVRV (30day) presented worrisome signs. The Market Value to Realized Value ratio represents the asset’s value. And, it was at a one-month low on 26 August.
However, a slight uptick in the same at press time suggested that some form of recovery could take place for the crypto-asset.
Finally, while active addresses had doubled when compared to last month, they were still lower than April’s levels.
XRP is at a crucial point right now, oscillating close to the $1-mark. While buying pressure could flip the price, there is time for XRP to hit its ATH. The altcoin will need to bridge the fair value gap to its local top before making a move in that direction.
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