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Ripple (XRP) extends its correction, testing $1.40 support on Wednesday on the backdrop of last week’s rally from $1.00 to highs of $1.70. Despite the remittance token falling for two consecutive days, it upholds a constructive technical structure, raising the odds of another breakout attempt toward the pivotal $2.00 target.
The crypto market sentiment remains elevated at 65 in the Greed territory on Wednesday, down from 74 the day before, as reflected in the Fear & Greed Index. This higher risk appetite aligns with steady inflows into spot Exchange-Traded Funds (ETFs), which rose to $24 million on Tuesday from $14 million the previous day.
XRP on-chain activity paints bullish picture
The number of addresses actively interacting with the XRP Ledger (XRPL) by sending or receiving assets has risen to 297,000 as of Wednesday, from roughly 119,000 the day before. Although the figure falls short of Monday’s 358,000 active addresses, it is significantly higher than approximately 47,000 last Friday and 25,000 on August 1.
Growing on-chain activity suggests higher user engagement, which may positively affect the underlying asset, especially if the price is trending higher at the same time.
Nevertheless, traders should temper expectations because profit-taking remains a significant risk. According to Santiment, the cohort of addresses with between 1 million and 10 million addresses has sold the token over the last few days and now holds 5.89% of the total circulating supply as of Wednesday, down from 5.96% last Sunday.
The sudden price increase could be prompting profit-taking among XRP whales, following extended price doldrums that tested sub-$1.00 levels in mid-August. If selling continues and open-market supply increases, the ongoing correction may extend toward key support levels at $1.25 and $1.00, respectively.
Technical Analysis: XRP tests key support, eyeing another breakout
XRP trades around $1.44, extending its correction from last week’s peak of $170. Despite the 72% rally from $1.00 cooling, the token broadly maintains a bullish bias as price holds well above the 50-day, 100-day and 200-day Exponential Moving Averages (EMAs).
Moreover, the recent surge in the Moving Average Convergence Divergence (MACD) into positive territory suggests solid upside momentum, even as the Relative Strength Index (RSI) remains overbought near 74, warning of potential consolidation rather than an immediate reversal.
Initial support lies at the 200-day EMA around $1.35, with deeper demand expected near the 100-day EMA at $1.19 and the 50-day EMA at $1.16 if a broader correction unfolds. On the topside, the next notable hurdle is the descending trendline resistance projected from $1.66. A sustained break above that structural cap would open the door for a rally continuation, while failure to clear it could keep XRP confined to a corrective phase above the clustered EMA support zone.
(The technical analysis of this story was written with the help of an AI tool.Know more.)
Cryptocurrency metrics FAQs
The developer or creator of each cryptocurrency decides on the total number of tokens that can be minted or issued. Only a certain number of these assets can be minted by mining, staking or other mechanisms. This is defined by the algorithm of the underlying blockchain technology. On the other hand, circulating supply can also be decreased to addresses of other incompatible blockchains
Market capitalization is the result of multiplying the circulating supply of a certain asset by the asset’s current market value.
Trading volume refers to the total number of tokens for a specific asset that has been transacted or exchanged between buyers and sellers within set trading hours, for example, 24 hours. It is used to gauge market sentiment, this metric combines all volumes on centralized exchanges and decentralized exchanges. Increasing trading volume often denotes the demand for a certain asset as more people are buying and selling the cryptocurrency.
Funding rates are a concept designed to encourage traders to take positions and ensure perpetual contract prices match spot markets. It defines a mechanism by exchanges to ensure that future prices and index prices periodic payments regularly converge. When the funding rate is positive, the price of the perpetual contract is higher than the mark price. This means traders who are bullish and have opened long positions pay traders who are in short positions. On the other hand, a negative funding rate means perpetual prices are below the mark price, and hence traders with short positions pay traders who have opened long positions.
John Isige is a seasoned cryptocurrency journalist and markets analyst committed to delivering high-quality, actionable insights tailored to traders, investors, and crypto enthusiasts.
He enjoys deep dives into emerging Web3 tren
Source: www.fxstreet.com