XRP has recently faced significant downward pressure, retracing sharply from its July rally. Following Bitcoin's retreat, the digital asset saw a substantial double-digit decline, raising concerns among investors about its immediate price trajectory and the potential for further losses.
Price Action and Bearish Indicators
The recent market dynamics saw XRP breach the critical $3 psychological level, which now acts as a formidable resistance barrier. This breakdown occurred amidst a broader market correction, with XRP experiencing a 13.6% drop as Bitcoin also pulled back. Technical analysis from the 12-hour chart paints a clear bearish picture; the Accumulation/Distribution (A/D) line indicates increasing selling volume, while the Awesome Oscillator points to sustained bearish momentum. Furthermore, the Directional Movement Index (DMI) confirms a strong downtrend, suggesting that a price bounce is not imminent. Analysts are eyeing the $2.6 mark as a crucial short-term target, a level that aligns with a Fair Value Gap and historical range highs.
On-Chain Activity and Future Outlook
On-chain data reveals that the intense selling pressure peaked around July 23rd, with unprecedented amounts of XRP moving to exchanges, largely driven by over 90% of the supply being in profit. While the immediate wave of selling may have somewhat subsided, the exchange net position remains positive, indicating continued distribution. However, a broader valuation perspective offers a glimmer of hope for long-term investors. The MVRV Z-Score, a key metric for assessing over/undervaluation, remains considerably below its historical peak levels. This suggests that XRP is not currently overvalued, potentially offering significant headroom for future growth. Consequently, if XRP retests the $2.6 level, it could present an attractive entry point for those with a longer investment horizon, signaling an opportunity for strategic accumulation.
