Ripple (XRP) on the verge of a breakout: a key indicator predicts growth of 20%
Date: 2023-08-27 Author: Karina Ziganova Categories: BLOCKCHAIN
The native token of the Ripple project is trying to win back the losses incurred as a result of the fall of the cryptocurrency market on August 17th.
The price of XRP has settled below $0.55 this week as the bears wiped out an early bounce attempt. However, key on-chain indicators show that Ripple’s network activity remains stable, giving hope for a speedy recovery.
Ripple is currently heavily undervalued
Ripple is currently heavily undervalued, according to the NVT on-chain indicator, which evaluates the underlying transactional activity on the network in relation to the price of the asset.
As shown in the chart below, between Aug 18 and Aug 24, the NVT ratio rose by a staggering 340% from 51.66 to 226. This spike indicates a steady increase in user activity even during a downtrend in price.
This means that XRP has every chance of a significant increase as soon as market sentiment turns bullish again.
Long-term investors expect a reversal
With the market crashing, many Ripple investors prefer to hold on to coins instead of taking losses. Last week, the values of the Mean Coin Age indicator dropped to 34.33, but by August 24 they recovered to 38.30.
Mean Coin Age allows you to evaluate the mood of long-term investors. It is calculated as the average number of days during which the coins in circulation were at the current addresses.
A 10% uptrend indicates that XRP holders are reluctant to sell tokens at current prices. Decreasing selling pressure can trigger a significant breakout.
XRP Price Prediction: Possible 20% Rebound
If transactional activity on the Ripple network continues to grow, and long-term investors continue to hold on to the coins, the XRP price will recover by 20% or more. The MVRV indicator, which reflects the net financial position of the current holders of the asset, also confirms this forecast.
As you can see in the chart above, the majority of market participants who bought a token during the last month have an unrealized loss of 15.70%. According to historical data, they will prefer to wait until the breakeven point or continue to hold XRP until they make a profit of 5%.
