Ripple
What does XRP’s falling MDIA mean for long-term holders?
Does the MDIA outweigh the short-term bearish signals from the other on-chain metrics?
- XRP saw a rapid increase in dormant activity that was followed by a 12% price drop.
- The falling MDIA gave long-term holders some bullish hope.
Ripple [XRP] saw increased whale activity last week, and whales holding more than $5 million are in possession of 55% of the token supply. This concentration among whales can lead to wild price swings, such as the one we saw on the 10th of July 2023.
The price was also in a consolidation phase in recent months and struggled to beat the range highs at $0.7 that has been in place since August 2023. The on-chain metrics showed that short-term selling pressure on XRP could increase.
Biggest dormant circulation spike in over a year
Source: Santiment
On the 2nd of September, the dormant circulation saw a huge spike. This showed an enormous storm of activity among XRP addresses. A surge in activity that eclipsed this was seen in June 2023.
Usually, an increase in this metric precedes a major price correction. XRP saw such a correction within the next four days, dropping 12.18% from $0.572 to $0.502.
The development activity was going apace for XRP, but its value was surprisingly low compared to large-cap industry leaders such as Cardano [ADA]. Meanwhile, the daily active addresses remained relatively stable in the past six weeks.
Assessing the chances of capital flow into the network
Source: CryptoQuant
The estimated leverage ratio spiked higher alongside prices in mid-July but has quietened down since then. This lack of movement over the past month showed that speculators were not keen to enter margin positions.
The finding reinforced the idea that XRP is undergoing consolidation.
Source: Santiment
In September, the mean coin age dived lower, corroborating the finding from the dormant circulation. This increased distribution has slowed down over the past two weeks, and the mean coin age was attempting to trend higher.
Realistic or not, here’s XRP’s market cap in BTC’s terms
More significant was the rapid decrease in the mean dollar invested age (MDIA). When the MDIA trends higher, it means that investments are getting more stagnant and old coins remain in the same wallets.
A downtrend usually signals that the token is ready for price appreciation. It implies that investments are flowing back into circulation and hints at increased network activity.
