XRP's daily active address count has soared to its second-highest level in May, raising traders' anticipation for a price rally.
The price of XRP (XRP) rose 6% to $0.51 on May 30 as the market's attention turned toward the latest spike in XRP network activity.
XRP's daily active addresses count near record high
The XRP network witnessed a sudden increase in the daily active addresses (DAA) — the number of unique addresses involved in XRP transactions daily.
For instance, on May 27, around 490,000 addresses interacted with the XRP network. That amounted to the second-largest address activity on the XRP blockchain, just three months after establishing the record DAA count of 880,000, according to data resource Santiment.
Interestingly, the DAA surge to a record high in March preceded a 45% price rally. This fractal may have prompted traders to speculate on a similar upside move after the latest DAA count rise.
This is primarily because of how the market interprets the DAA indicator. It considers a rise in active addresses as bullish for the concerned token. Conversely, a drop in active addresses is considered bearish.
Nonetheless, history presents the DAA indicator as a flawed one. For instance, the spikes in XRP's DAA count between November 2021 and April 2022 coincides with the token's price decline, as shown in the chart below.
As a result, XRP remains at risk of declining, primarily because of an uncertain macroeconomic outlook that could hurt the crypto sector broadly.
XRP eyes a 20% decline in June
From a technical standpoint, XRP could drop in the coming weeks as the token retests its multi-month horizontal trendline resistance for a potential pullback.
If a retreat occurs, XRP price may aim for its multi-month ascending trendline support as its primary downside target. That could theoretically take the price to around $0.40, down 20% from current price levels.
Related: Bitcoin reclaims $28K, and charts suggest ARB, XRP, EOS and AAVE could follow
Conversely, a breakout above the horizontal trendline resistance could trigger an ascending triangle reversal breakout, pushing XRP price toward $1, as illustrated below.
A potential Ripple win in the ongoing lawsuit against the U.S. Securities and Exchange Commission (SEC may prompt such a breakout move.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
from Cointelegraph.com News https://ift.tt/vQHu2GT
No comments:
Post a Comment