Bitrabo Editorial
The price of Ripple (XRP) experienced a significant surge, reaching a new peak of $0.56 on Tuesday. However, the recent announcement of the Federal Reserve’s rate decision has caused the XRP price rally to come to a halt. The question now is how long this bearish trend will last.
The Ripple (XRP) team has positioned the XRP Ledger as the leading blockchain solution platform for governments and institutional players. As a result, the XRP price has become highly sensitive to the actions of whale investors.
Following the Fed’s rate announcement on Wednesday, June 14, institutional investors began selling off their XRP holdings. Compared to other Layer-1 altcoins, XRP was disproportionately impacted, resulting in an 18% price crash by the end of Thursday.
The key question now is whether the XRP Ledger will be able to attract new demand and reverse the bearish outlook in a timely manner.
XRP Whales Are Selling Off Their Coins
Institutional investors have been selling off their XRP holdings, partly in response to the recent Fed announcement. On-chain data indicates that the whale cohort, holding 100 million to 1 billion XRP coins, started selling on June 11. However, the selling pressure intensified following the June 14 announcement.
Between June 11 and June 16, these whales have withdrawn a total of 300,000 million coins. With the current market price at $0.46, the value of these coins sold is approximately $138 million. The significant volume of coins sold by the whales within a week has played a major role in the current price downturn.
Unless this trend reverses, it could discourage potential investors and cause existing investors to adopt a bearish stance, prolonging the bearish price trend for XRP.
XRP Network Value is Decreasing
On-chain data indicates that the value of the XRP network has declined over the past week. This suggests that the recent price rally was driven by market speculation rather than the underlying economic activity of the network.
The Network Value to Transaction Volume (NVT) ratio, a metric used to assess the growth of a cryptocurrency’s market value relative to transactional activity, has risen by 35% from 64.49 to 87.39 between June 12 and June 16. This increase in the NVT ratio indicates that the asset price is growing faster than the network’s economic activity, which typically occurs during periods of heightened market speculation.
The current rally in XRP was largely a response to investors reacting to the Securities and Exchange Commission’s (SEC) crackdown on major exchanges and its classification of some Layer-1 altcoins as securities. If XRP fails to attract higher demand through concrete user acquisition and increased transactional activity, the NVT ratio is likely to continue rising.
In summary, strategic investors will closely monitor the behavior of whale investors and the growth in transactional activity to anticipate XRP price movements in the coming days.
XRP Price Prediction: A Bearish Downswing Towards $0.40
If transactional activity declines further and bearish whale investors continue to sell off their holdings, the XRP price is likely to fall below $0.40 again. With the current price at $0.46, investors who bought XRP in the past month would face an 8% loss if they were to sell today.
According to the historical Market Value to Realized Value chart, these investors are likely to keep selling until their losses approach 10%, around $0.42. If the bearish on-chain trends identified earlier persist, the XRP price could drop even further below $0.40.
On the other hand, if the bulls manage to push the XRP price above $0.50, it could reverse the pessimistic sentiment. However, many investors are expected to sell at $0.49 to break even. Alternatively, if positive market conditions prevail, XRP could reclaim its peak price of $0.55 in 2023.
Disclaimer
In compliance with the Trust Project guidelines, this price analysis is for informational purposes only and should not be considered financial or investment advice. Bitrabo is committed to accurate and unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.