Crypto analytical platform Santiment has shared the reason behind the recent downward trend affecting XRP, forecasting an imminent rebound.
Santiment, a reputable crypto market analytical tool, has recently shed light on the reason behind the recent decline in XRP’s price. According to a tweet by Santiment, top cap cryptocurrencies are currently being traded at a loss following a period of high profit taking.
? Top cap #crypto assets are being traded at a loss after the high profit taking last week, lending to the price drop we've seen. $XRP and $ADA are seeing a particularly high amount of sells at lower prices, making the chances of bounces increase. https://t.co/Ntt3HoC52S pic.twitter.com/z5BatBNlKe
— Santiment (@santimentfeed) July 7, 2023
This phenomenon has contributed to the drop in prices observed across the market, with XRP and Cardano (ADA) experiencing an exceptionally high amount of selling at lower prices. However, the tweet also suggests that this situation may soon pave the way for potential price bounces.
A Cluster of Loss-Inducing Trades
The tweet mentions the Ratio of Profit/Loss Transactions which provides insights into the profitability of on-chain transactions for various assets.
This indicator represents the ratio of daily on-chain transaction volume in profit to loss for each cryptocurrency. Traders and analysts use the metric to gauge the extent to which market participants are currently making profits or incurring losses.
Interestingly, four of the five top cryptocurrencies assessed by Santiment are seeing loss-incurring trades, with the exception of Ethereum (ETH) alone.
Notably, while Bitcoin (BTC) investors see losses on their trades, the firstborn crypto is observing the lowest ratio of loss-inducing transactions, with a value of -0.01006. Litecoin’s ratio stands at -0.108436, with ETH seeing a ratio of 0.078415.
In XRP’s case, Santiment highlights a concerning figure of -0.350046, lower than all other assets. This indicates that the volume of on-chain transactions involving XRP has predominantly been associated with losses rather than profits.
Consequently, it is no surprise that XRP has been facing a downward trajectory since reaching a high of $0.5272 on June 22. At its current value, XRP is down 11.47% in the last two weeks.
The drop in XRP’s price is not an isolated event, as ADA is also experiencing price declines along with a negative ratio. ADA’s ratio is currently -0.106127.
Higher Chances of Rebound for XRP and ADA
Despite the recent challenges faced by XRP and ADA, Santiment’s analysis offers a glimmer of hope. The increased selling pressure at lower prices may indicate an imminent bounce in prices for these cryptocurrencies.
As market participants take advantage of lower prices to accumulate XRP and ADA, it could create a favorable environment for a potential rally. On-chain data shows that while minnow addresses (holding 1 to 100 XRP) have been dumping their tokens, whales (holding 1M to 100M XRP) have continued accumulating.
Recently, CoinsKid, a well-known analyst, highlighted XRP’s potential to reclaim the $0.69 price territory. He asserted that XRP could skyrocket to new yearly highs once it breaks above an identified downward trendline on the daily chart.
As of press time, XRP is currently changing hands at $0.4667, while ADA is trading for $0.2849. Investors should always exercise caution and conduct thorough research before making any financial decisions.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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