XRP has been slowing bullish recently following a period of sustained price growth. Benefiting from strong investor interest, Altcoin has begun to lose some of its upward momentum.
Prices are falling, but some market experts believe the strength of investor support could prevent XRP from experiencing significant losses in the short term.
XRP loses Bitcoin backing
The correlation between XRP and Bitcoin has decreased significantly, dropping to 0.4. This is the lowest level since February this year.
Historically, as this correlation weakened, XRP prices fell sharply, falling 22%. However, after that decline, assets recovered.
As Bitcoin recently reached a new all-time high (ATH), the decline in correlation could be seen as a sign of weakening XRP support.
Bitcoin’s powerful performance can usually lift Altcoin, including XRP. However, this disconnect raises concerns that XRP may not be able to take advantage of Bitcoin’s success. As correlation continues to decline, XRP may face more challenges in the coming weeks.
In contrast to weakening correlations with Bitcoin, XRP investors’ behavior shows a more stable trend. Total XRP supply, which has remained touched for three to six months, has steadily increased this month.
This suggests that short-term holders (STHs) have matured and become medium-term holders. This shift is a positive sign as it shows increased stability and reliability for XRP investors.
An increase in the supply of dormant XRP indicates that more investors are holding tokens rather than selling them. This long-term holding action provides a buffer against short-term price fluctuations and helps maintain the value of the asset at points of uncertainty.
XRP prices could bounce back
XRP is currently trading at $2.26, falling below the $2.27 support level in the last 24 hours. This price has steadily declined over the past two weeks, mainly because it cannot break the $2.58 resistance.
This suggests that upward momentum is stuck and prices may continue to face downward pressure.
If this decline continues, XRP may test its next level of support at $2.12, marking a huge loss for investors. Further declines could increase bearish emotions and lead to more sales pressure.
However, when investor support strengthens and stabilizes prices, XRP can retain a support level of $2.27. This will further increase the potential rebound to under $2.38, and will invalidate the current bearish outlook.
This support could pave the way for new attempts that could push prices higher than the $2.58 resistance.
Disclaimer
In line with Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. Although Beincrypto is committed to accurate and unbiased reporting, market conditions are subject to change without notice. Always carry out your research and consult with an expert before making any financial decisions. Please note that our terms and conditions, privacy policy and disclaimer have been updated.
