Below $3 again, XRP faces heavy pressure – But THIS level can flip the trend
The rally past $3 in July did not see the MVRV-Z score rise to extreme values, a bullish sign for long-term investors.
Key Takeaways
XRP saw intense selling pressure toward the end of July after the rally past the $3 mark. Since then, the price has retraced back below this key psychological level — will the bears drive prices even lower?
Ripple [XRP] saw sizeable losses in recent days as Bitcoin [BTC] was forced to beat a hasty retreat from the $119.8k mark. Since Monday, the 28th of July, BTC prices have fallen 5%.
During this time, XRP has descended 13.6%.
One critical breakdown was the loss of the $3 psychological level. This barrier, which had stalled XRP bulls earlier in July, now acts as renewed resistance.
A fresh push past $3 could be difficult given the weight of selling and profit-taking above it.
Momentum cools, but the downtrend holds
Technical analysis of the 12-hour chart showed that such a price bounce was likely not imminent.
The A/D was sloping downward to show increased selling volume over the past week, and the Awesome Oscillator also highlighted bearish momentum.
Naturally, the Directional Movement Index reinforced this picture. The -DI and ADX both hovered above 20, confirming that the market remains in a strong downtrend.
With the structure still bearish, XRP could dip further before buyers regain confidence.
However, one zone worth watching is $2.6. This level overlaps with a Fair Value Gap and coincides with former range highs on the 1-day chart, making it a likely short-term target.
Will XRP drop further than $2.6?
XRP investors were moving the token to exchanges in unprecedented numbers, peaking on the 23rd of July. This reflected intense selling pressure.
The Percent Supply in Profit was above 90%, helping explain the selling. Since then, the exchange net position change has dampened, but remained positive at press time. The worst of the selling might be past us.
Valuation shows headroom for growth
Source: Glassnode
Another key metric, the MVRV Z-Score, remains well below historical peak levels, despite the rally past $3 in July. This suggests that XRP is not extremely overvalued.
Naturally, this opens the door for further long-term upside. If XRP does revisit $2.6, it may offer a strong entry point for investors with a longer horizon.
