A cryptocurrency analyst has explained how XRP is at risk of falling towards $0.80 based on the data from some on-chain indicators.
XRP has seen bearish developments in on-chain data
In a new wire on X, analyst Ali Martinez discussed why XRP is at risk of falling to the $0.80 level. “First, network activity has cooled down significantly,” Martinez said. There are many ways to measure network activity, but the analyst used the indicator for active addresses on the chain.
This metric tracks the total number of addresses participating in some transaction activity on the blockchain each day. A chart previously shared by the analyst showed a decline in this metric for XRP.
In general, a decline in the benchmark is a sign of a decline in interest in the asset. “The number of daily active addresses has dropped to approximately 38,500, indicating declining participation and interest,” Martinez said.
Another indicator in the chain has also shown a development recently: the supply of whales. Whales refer to the big money investors in the market who have significant amounts of money in their pockets.
As the chart below shows, these investors recently participated in the sale of approximately 40 million tokens.
Due to the enormous size of their assets, whales are considered influential entities on the network, so their behavior may be relevant to the cryptocurrency. Since these huge hands have been sold off on the XRP blockchain lately, it is possible that the coin is experiencing a bearish effect. If anything, the trend reflects that the major investors in the assets are showing weaker confidence.
Finally, the analyst shared a chart for the cryptocurrency’s UTXO Realized Price Distribution (URPD). This indicator basically tells us about the amount of supply that investors last purchased at the different price levels that the coin has visited in its history.
The chart shows that a notable amount of supply has a cost basis of $1.77, which is not far below the current XRP spot price. It is possible that if the asset retests this level, the investors who made their purchases there could see a reaction.
When the market mood is bullish, this reaction is usually dominated by buying. However, given the current sentiment in the digital asset sector, the support may not be enough. “If selling pressure continues, XRP risks losing support at $1.77,” Martinez explained. “A breakdown there opens the door to the next major support zone near $0.80.”
This support zone near $0.80 is currently the largest demand zone above the $1.77 level.
XRP price
At the time of writing, XRP is hovering around $1.86, unchanged from a week ago.