Can XRP garner enough buying volume for a bullish bounce back

XRP has retraced back to its mid-June lows after a rally attempt that yielded an almost 30% upside. However, the short-lived rally gave way to a substantial bearish retracement, undoing the gains.

XRP traded at $0.31 at press time after a 15% downside in the last seven days. The bearish retracement has pushed it back to mid-June price levels where it bottomed out. This means that the press time price action is retesting last month’s support levels.

Source: TradingView

XRP’s declining sell pressure suggests the likelihood that the $0.30 support level might hold and potentially trigger another upside. However, it is still not oversold despite the latest downside, which means there is still room for the bears to push further. Its RSI was at 37.18 while its MFI was at 43.17.

Moving with the flow

Although the selling pressure dropped significantly in the last two days, there is no guarantee of a bullish reversal. The price, at press time, was within a zone of uncertainty, but on-chain metrics might provide some clarity.

The number of XRP’s active addresses increased from 24,139 on 1 July to 51,248 by 3 July. This might be a sign of incoming bullish volumes courtesy of the lower prices and support retest. Network growth was at its highest level in 30 days, and this might be encouraging to existing and potential investors.

Source: Santiment

The increase in 24-hour active addresses does not confirm whether those addresses added or offloaded XRP. However, the supply distribution by the balance on addresses may help paint a better picture. Addresses holding between 100,000 and one million XRP increased their holdings from 9.9% on 1 July to 9.94% by 3 July.

Source: Santiment

Addresses holding between one million and 10 million XRP increased their balances from 6.68% to 6.69% during the same period. Meanwhile, accounts holding more than 10 million XRP reduced their holdings from 72.08% to 71.98%.

Interestingly, addresses holding more than 10 million are currently the only class of whales selling their XRP holdings. However, this class also happens to control most of the XRP.

This explains why XRP was still struggling to overcome the bearish pressure at press time. A shift in favor of accumulation by the larger category would yield substantial bullish pressure.