- XRP may find it difficult to compete with the performance of other altcoins
- Two metrics supported a recovery, but data showed it could be short-lived
The price of XRP has been hit hard over the past 30 days, with its value falling 11.71%. Needless to say, other altcoins have also fallen on the charts. However, the case of XRP seems different, especially considering that it was one of the worst performing cryptocurrencies this year.
This disappointing showing begs the question: should you sell your XRP? Here AMBCrypto will look at various metrics and developments that can give you an idea of the token’s future performance.
Let’s look at the trading volume first: on April 5, the volume of XRP jumped past $2 billion. Funnily enough, this period was also when the price dropped to $0.57.
Source: Santiment
Keep the token outside
Rising volume and falling prices do not bode well for traders who are optimistic about the price action. Instead, the trend suggests that the token’s value could continue to decline. However, AMBCrypto found that Ripple’s announcement that it is introducing a stablecoin was one of the reasons that volume increased. But is this really bullish news for XRP?
It can be argued otherwise. This is because a stablecoin on Ripple’s network could make XRP less competitive with other altcoins.
Furthermore, the cryptocurrency may no longer be able to achieve the “global reserve token” goal the company had in mind for it. Should XRP succumb to the above statement, it could be deprived of liquidity. Therefore, the price may fail to achieve a bull market-like performance.
Another metric worth looking at is weighted sentiment. According to AMBCrypto’s on-chain analysis, XRP’s Weighted Sentiment has risen, reaching its highest point since January 26.
The potential increase may be temporary
This increase suggested that market participants may have been optimistic about the price action. However, it is also important to look at what happened to the price in January.
When the sentiment pointed at that time, the price of XRP was $0.54. Days later, the value of the token dropped to $0.49. If history repeats itself, XRP could rise to $0.59.
Source: Santiment
However, the potential increase could be short-lived and a decline of 9.25% could occur in the short term.
In addition to the weighted sentiment, AMBCrypto also evaluated the open interest (OI). At the time of writing, XRP’s OI was declining, indicating that traders have increasingly closed out their net positions. A reasonable inference from the decline would be that sellers are more aggressive.
If the decline continues to decline like the price, a recovery could be next. However, as the historical record implied, the potential rebound might not last long.
Read Ripple’s [XRP] Price forecast 2024-2025
From a long-term perspective, XRP could be one of the lowest performing assets of this cycle. If you are someone who expects parabolic returns, the token may not be able to provide that.