- Ripple transaction volume climbed to $3.96 billion on Monday, and retail traders capitulated, according to Santiment data.
- On-chain metrics paint a bullish picture for XRP recovery amidst the latest developments in the SEC vs. Ripple lawsuit.
- XRP wiped out nearly 1% of its value on Wednesday, technical indicators suggest recovery is likely.
Ripple (XRP) made a comeback above $0.48 on Tuesday and hovers above that level in Wednesday’s European session. Ripple on-chain metrics such as transaction volume and Network Realized Profit/Loss (NPL) have turned bullish, supporting a recovery in the altcoin.
The US Securities and Exchange Commission (SEC) vs. Ripple lawsuit proceeds with the issue of fines for the alleged violation of securities laws. While Ripple proposed $10 million in penalties, the SEC quoted $102.6 million in a filing on May 29.
Daily Digest Market Movers: Ripple traders see signs of recovery in bullish on-chain metrics
- Ripple on-chain metric transaction volume, which tracks the demand for an asset and its relevance among traders, noted a large spike on Monday, as Ripple’s transaction volume climbed to $3.96 billion, according to Santiment data.
- Higher transaction volume is associated with higher activity on the chain and demand for XRP among traders. When combined with the Network Realized Profit/Loss (NPL) metric, transaction volume offers a complete picture, as to whether traders are taking profits or losses and where XRP is headed.
 [13.11.32, 03 Jul, 2024]-638556055100384541.png)
XRP transaction volume vs. price
- The NPL metric shows consistent losses taken by XRP traders, a sign of capitulation. Capitulation is marked by traders shedding their holdings at a loss, and a recovery in the asset’s price typically follows.
- The large negative spikes on NPL represent XRP traders’ realized losses in the past week.
 [13.11.37, 03 Jul, 2024]-638556055414227876.png)
XRP NPL vs. price
- When the two metrics are combined, it is clear that large-volume transactions were associated with traders realizing losses, and this supports the thesis of capitulation for XRP. The altcoin could see a recovery soon if the historical trend repeats.
- The SEC vs. Ripple lawsuit has no new update after the discussion of settlement fees among the two parties.
Technical analysis: XRP eyes comeback to $0.5330 resistance
XRP is trading at $0.4841 on Wednesday. While the altcoin erases nearly 1% of its value on the day, the Moving Average Convergence Divergence (MACD) momentum indicator in the daily chart suggests a recovery in XR/USDT is likely.
The MACD shows green histogram bars above the neutral line, and the MACD line crosses above the signal line, supporting a bullish thesis for XRP.
XRP could rally towards the Fair Value Gap between $0.5008 and $0.5164, as seen in the chart below. The next resistance for Ripple is $0.5330.
XRP/USDT daily chart
On the contrary, if XRP suffers a correction, Ripple could find support at $0.4508, the June 7 low. Further support is the April 13 low of $0.4188.
Cryptocurrency metrics FAQs
The developer or creator of each cryptocurrency decides on the total number of tokens that can be minted or issued. Only a certain number of these assets can be minted by mining, staking or other mechanisms. This is defined by the algorithm of the underlying blockchain technology. Since its inception, a total of 19,445,656 BTCs have been mined, which is the circulating supply of Bitcoin. On the other hand, circulating supply can also be decreased via actions such as burning tokens, or mistakenly sending assets to addresses of other incompatible blockchains.
Market capitalization is the result of multiplying the circulating supply of a certain asset by the asset’s current market value. For Bitcoin, the market capitalization at the beginning of August 2023 is above $570 billion, which is the result of the more than 19 million BTC in circulation multiplied by the Bitcoin price around $29,600.
Trading volume refers to the total number of tokens for a specific asset that has been transacted or exchanged between buyers and sellers within set trading hours, for example, 24 hours. It is used to gauge market sentiment, this metric combines all volumes on centralized exchanges and decentralized exchanges. Increasing trading volume often denotes the demand for a certain asset as more people are buying and selling the cryptocurrency.
Funding rates are a concept designed to encourage traders to take positions and ensure perpetual contract prices match spot markets. It defines a mechanism by exchanges to ensure that future prices and index prices periodic payments regularly converge. When the funding rate is positive, the price of the perpetual contract is higher than the mark price. This means traders who are bullish and have opened long positions pay traders who are in short positions. On the other hand, a negative funding rate means perpetual prices are below the mark price, and hence traders with short positions pay traders who have opened long positions.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Ripple on-chain metrics show bullish signs amidst legal struggle with SEC, XRP eyes recovery
Ripple made a comeback above $0.48 on Tuesday and hovers above that level in Wednesday’s European session. Ripple on-chain metrics such as transaction volume and Network Realized Profit/Loss have turned bullish, supporting a recovery in the altcoin.
Bitcoin price falls amidst German government transfers, miners activity
Bitcoin (BTC) extends correction on Wednesday and hovers around $61,000 after finding resistance near the $64,000 level on Monday. Recent on-chain data indicates heightened selling activity from Bitcoin miners early in the week.
Crypto Today: Bitcoin erases gains from end of June, Ethereum declines while Ripple holds
Bitcoin wipes out gains from the last week of June and falls below $60,000 on Wednesday. Ethereum and top altcoins ranked by market capitalization erased gains as the inflation outlook worsened. Ripple holds on to recent gains and hovers above $0.48 on Wednesday.
Three reasons why altcoins could shake off losses this week
On-chain data from Santiment shows that altcoins are currently in the opportunity zone, or generating buy signals. The top three altcoins in the buy zone are Basic Attention Token (BAT), Chromia (CHR), and Highstreet (HIGH), per Santiment.
Bitcoin: BTC price correction could end in July, according to seasonal data
Bitcoin (BTC) price appears poised for a decline this week, influenced by slight outflows in US spot ETFs, selling activity among BTC miners, and a combined transfer of 4,690.28 BTC to centralized exchanges by the US and German governments.