Despite the speculative activity around XRP pointing to a bullish setup, blockchain fundamentals cast doubt on the sustainability of a potential price surge. Let's delve deeper into the medium-term outlook for the Ripple altcoin.
Technical analysis highlights the bullish configuration of XRP, Ripple’s cryptocurrency. Since its explosive peak in late 2024, XRP has been evolving within a large symmetrical triangle, forming higher lows and lower highs, narrowing toward the apex of the structure. Currently, Ripple is trading at $2.19, just above the key support at $2.08, with major resistance levels at $2.35 and $2.61.
Despite declining transaction numbers and network growth for XRP, the selling-tenor purchase volume has been strong, indicating market optimism. This speculative buying activity contrasts with declining on-chain indicators, creating an imbalance between market conviction and actual blockchain usage.
Indeed, the number of XRP transactions has dropped to 383,000, marking one of the lowest daily values since March. Network growth has also decreased, reflecting reduced interest from new users. This decline in organic activity is concerning despite the prevailing bullish sentiment.
However, this sentiment could well turn positive as the next SEC decision approaches, scheduled for July 3rd.
The NVT ratio has reached an extreme level of 4510, suggesting overvaluation relative to actual blockchain usage. A valuation disconnected from real utility can put XRP under pressure, especially if transaction activity doesn’t follow suit.
Furthermore, the Stock-to-Flow ratio has increased significantly, indicating greater scarcity with slower entry of new supplies into the market. However, scarcity alone may not be enough to propel XRP much higher without increasing demand or enhanced utility.
XRP finds itself at a crossroads between a possible bullish explosion and on-chain weaknesses. The coming weeks will be crucial in determining whether XRP can reach its medium-term target.
If the price breaks the triangle with high volume and on-chain metrics begin to recover, XRP could indeed reach $5. Otherwise, the breakthrough might prove short-lived.
XRP seems poised for a breakout, and the waning interest could ultimately signal an opportunity for savvy investors.
Despite bullish signals, the challenges posed by XRP’s fundamentals must be closely monitored to assess the sustainability of any price increase. Ripple’s altcoin future remains uncertain and will depend on the network’s ability to regain vigor in the coming weeks.
Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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