Despite XRP’s considerable gains this year, the cryptocurrency appears to be stuck in a decline since touching its yearly high of $0.35 earlier this month. After a 23% drop in the days that followed, XRP had a market value of $0.267, at the time of writing.
According to CoinMarketCap, XRP had a market capitalization of over $11.66 billion, while recording a 2.9% decline over the last 24-hours.
Source: Coinstats
XRP 12-hour chart
Source: XRP/USD on TradingView
Towards the start of this month, XRP appeared to have entered a ‘head-and-shoulders’ formation. These patterns usually facilitate bearish outcomes and are an immediate sign that XRP could depreciate in the short-term.
At the time of writing, XRP had a market value of $0.267 and was testing the pattern’s neckline. The cryptocurrency saw relatively strong support at this level throughout the pattern, though this might be the time when XRP dips under it.
The EMA ribbon lines were moving above the price line, which generally means increased resistance at higher price levels for the short-term. The MACD also predicted bearish movements, having maintained its bearish crossover from earlier this month.
With the faster-moving average having dipped under the slower one and persistent bearish momentum in recent times, it is likely the cryptocurrency will break below the pattern in the next few days, which will probably find XRP at the $0.223 level in the week that follows.
NVT Signal
Source: CoinMetrics
The network value to transactions (NVT) ratio is a metric calculated by dividing the asset’s total market capitalization by its daily transaction volume. The NVT signal (NVTS) is derived from this, except instead of using daily transaction volume, a 90-day average is utilized. The metric had been rising since mid-December last year up until around a week ago. This is likely due to the 95% rise in XRP’s value over the period.
However, data from CoinMetrics showed that the NVTS appeared to be declining, experiencing a 25.8% drop since 13 February. This likely means that the XRP network’s growth is declining and could see increased bearish pressure as the week progresses.
Conclusion
XRP will most probably face some downward movement in the coming days, especially considering bearish signals from the EMA ribbons and MACD. Further, the declining NVT signal also indicates price depreciation in the short-term. This likely means that the coin will break down from the pattern, touching the $0.223 level in the coming week.
