Key Takeaways
Multiple bearish signs seemed to be rearing their heads for XRP, starting with the triangle pattern on the daily price charts. The hike in exchange reserves cemented the bearish conviction too.
XRP, at press time, flashed signs of seller dominance across the spot market. The Network Value to Transactions metric saw a swift spike too, one that indicated that the altcoin might be overvalued relative to its network activity.
Taken together, these may be worrying signs for XRP holders.
Source: XRP/USDT on TradingView
Moreover, the price trend recently has been bearish. A downward breakout appeared imminent at press time. This was due to a descending triangle formation. In fact, this chart pattern has been a consolidation above the key support at $2.74 before the downtrend continuation.
The rest of the market was not particularly bearishly poised either. Bitcoin [BTC], for its part, has been slowly climbing higher after defending the $107k liquidity pocket from the sellers. Ethereum [ETH] also held the $4.3k demand zone and seemed to be waiting for a sentiment shift to trend higher.
According to AMBCrypto’s analysis, the spot taker CVD and NVT ratio signaled bearishness for the price. Hence, the question – Did other metrics show any different?
Is XRP likely to see a sizeable sell-off soon?
A worrying sign was the sharp spike in the dormant circulation among medium-term holders. This spike came on 01 September, when XRP briefly fell to $2.6975 before bouncing slightly.
The large spike signified a flurry of token movement out of holder addresses. This typically accompanies a wave of selling. The mean coin age, which had been trending higher in August, saw a rapid drop as well.
The MVRV showed that 90-day holders recorded a minor loss on average. The metric was not as deeply negative as it was in April. If the mean coin age can recover its uptrend over the next two weeks, XRP could offer a buying opportunity.
The bearish breakdown from $2.74 was made more likely by XRP exchange reserves springing higher. The inference of selling pressure from the dormant circulation metric’s spike was likely correct, as XRP exchange reserves surged to highs not seen in over a year.
Therefore, XRP traders and investors can expect a bearish move in September. Chances of recovery appeared slim too, and the token would need time to recover to $3 and higher.
