XRP price smashes downtrend, leaves Ripple primed for an incremental rally

  • XRP price rebound is one of three 30%+ gains in April.
  • Daily Relative Strength Index (RSI) did not reach an oversold level on Sunday.
  • On-chain metric MVRV signaled that a bounce was imminent.

XRP price quickly overcame the April downtrend with an explosive 30% rally yesterday, but the follow-through today has slowly faded. Price compression related to yesterday’s gain will contain additional gains in the short-term, but new developments in the SEC case could override the chart technicals at any time.

XRP price validation comes with higher volume totals

The MVRV metric shows the average profit/loss of all coins currently according to the current price. More specifically, ‘MV’ stands for market value and describes the market capitalization. The second component is ‘RV,’ which stands for realized value.

Higher MVRV (30d) values indicate that more people are willing to sell and take profits and lower values mean that most people will be realizing losses if they sell all their holdings. 

This metric tends to rise during strong and long bull runs and decreases during bear markets. The rationale is that during solid bull runs, the long-term holders determine when the bull run will end by selling their positions. During bear markets, the long-term holders are at a loss on average, and the short-term holders manage to realize profits.

The current reading is 27.35%, up from the -2.3% on April 24-25. The metric did not reach the lows of February at -11.40%, but it highlighted that the decline had put Ripple in undervalued territory. 

At the current reading, the cross-border remittances token is far from the overvalued conditions that matched the November 2020 high, the January high, or the high this month, hinting at more upside for XRP price moving forward.

XRP MVRV ratio (30d)

Last week Ripple closed down 26.41%, the largest weekly loss since the SEC charged crash in December 2020 of 49%. It yielded a total decline of 55% for the international settlements token from the April high.

XRP price responded with a 30% gain yesterday, but today’s follow-through has faded quickly at the 50% retracement of the April decline. More resistance can be expected at the 61.8% retracement at $1.55 and the 78.6% retracement at $1.73.

The prominent levels in the crosshairs are $2.00 and the 61.8% retracement of the 2018-2020 bear market at $2.08.

XRP/USD daily chart

XRP/USD daily chart

The path for Ripple is more complicated than most cryptocurrencies at the moment, with the overhang of the SEC case against key executives regularly headlining media reports. A positive outlook will remain the best approach unless the descending trendline from the April high at $1.15 fails. After that, the big $1 is the final arbitrator over whether XRP price falls to $0.80 or not.