Ripple (XRP) price surged 30% last week, reacting to the positive outcome of the SEC vs. Ripple legal battle. Although the rally was impressive, it failed to reach a higher high, causing whale investors to dump their holdings. As a result of this on-chain movement, XRP value could face a major correction in the coming days.
XRP price ready for further downtrend
XRP price shot up 30% on August 7 to hit a swing high of $0.644, which is below the July 30 local high of $0.658. From a market structure perspective, this lower high sends the message that buyers were unable to push the token higher, i.e. there was a lack of demand. As a result, Ripple price has fallen 9% since the swing high of $0.644.
With the XRP price at $0.585, investors can expect the 30 percent rally to end soon.
A rally at the start of the week could push XRP, a remittance token, to retest the $0.613 resistance level. A rejection here would be a sign that buyers are exhausted. Such a signal would suggest a nearly 10% correction to the $0.560-$0.555 support area.
On-chain data suggests pessimistic outlook for Ripple
While the technical perspective suggests a bearish forecast for the XRP price, on-chain data confirms this. Santiment’s Supply Distribution By Balance metric shows that wallets holding 1 to 10 million XRP accumulated 230 million tokens from July 17 to August 2, suggesting a positive outcome in the SEC vs. Ripple litigation.
The same wallets started booking profits and dumping their tokens, and on August 7, their balance reached a low of 3.8 billion after dumping 150 million XRP.
Furthermore, this movement is confirmed by the Whale Transaction Count indicator, which tracks transfers worth $100,000 or more. This indicator peaked on August 7, when the XRP price rose 30%, suggesting that these whales were selling.
The technical and on-chain data suggest that institutional investors have been selling their shares following the conclusion of the SEC-Ripple legal battle. Although a short-term correction is likely, this could be reversed if the Bitcoin price continues to rise.
Such a development could attract buyers’ interest and push the XRP price above the critical resistance level of $0.613. Converting this barrier into a support floor could trigger bullish momentum and potentially push XRP to $0.655 million, the next key hurdle.
Read more: Ripple Stablecoin RLUSD Private Beta live on XRP Ledger and Ethereum Mainnet
Frequently Asked Questions (FAQs)
On August 7, a judge ordered Ripple Labs to pay a $125 million fine to the Securities and Exchange Commission (SEC), ending a three-and-a-half-year legal battle.
XRP price rose by 30% but failed to reach a higher high, which could lead to a possible correction.
On-chain data confirms a bearish outlook as XRP whales sold their holdings following the conclusion of the SEC vs. Ripple litigation on August 7.
Akash Girimath
Akash Girimath is basically an engineer but is interested in the chaos of financial markets. Akash is a senior reporter and analyst who also regularly trades cryptocurrencies and manages a small cryptocurrency fund for friends and family.
Disclaimer: The content presented may contain the personal opinion of the author and is subject to market conditions. Conduct market research before investing in cryptocurrencies. The author or publication assumes no responsibility for your personal financial loss.
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