XRP Recovers 8% After Brief Drop Below $2
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The Key Takeaways:
- The price of XRP briefly dropped below the $2 mark but quickly recovered by 8%.
- On-chain data indicates the reactivation of previously dormant XRP tokens, suggesting increased liquidity and trading activity.
- The taker-buy ratio in XRP’s derivatives market signals growing buyer dominance.
- Technical indicators like exponential moving averages (EMA) point to a potentially sustained upward movement.
Reactivated XRP Tokens: A Signal of Rising Liquidity
The so-called Mean Dollar Invested Age (MDIA), an indicator of the average holding period of tokens, has significantly dropped for XRP. A low MDIA value suggests that previously inactive tokens are being brought back into circulation. This is often a sign of growing investor confidence.
Currently, XRP’s MDIA value has reached its lowest level since early November. This development indicates that more tokens are being traded, boosting liquidity and trading volume. Both factors are critical for sustained price increases. If this trend continues, XRP could maintain its upward momentum.
Derivatives Market: Buyers Gaining the Upper Hand
Another positive indicator is the Taker-Buy Ratio, which measures the proportion of buy orders relative to total taker trades. Values above 0.5 signal buyer dominance. According to recent data, XRP’s taker-buy ratio stands at 0.55, indicating increased buying activity.
Historically, such values correlate with sustained price gains. If the taker-buy ratio remains above 0.5, it could support further growth. However, a drop below this threshold might indicate waning buyer interest.
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Technical Analysis: Support Levels and Volume
On the 4-hour chart, XRP’s price briefly dipped below the 20- and 50-day EMAs (Exponential Moving Averages) on December 12. The quick rebound above these moving averages has strengthened buyer confidence. These EMAs now act as dynamic support levels.
Currently, the price is consolidating near the $2.40 mark. The low trading volume suggests that selling pressure has eased. If volume increases while the price remains stable, XRP could regain momentum and target the $2.90 level. Without a rise in volume, however, the price may move sideways or retest the support at $2.30.
Our Assessment
The recent recovery of XRP demonstrates that buyers remain in control. The reactivation of dormant tokens and positive developments in the derivatives market point to a continuation of the uptrend. However, trading volume remains a crucial factor. Without significant volume growth, momentum could stall. For investors, it is essential to monitor both on-chain data and technical indicators to make informed decisions.
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| Symbol | XRP |
| Coin type | Alt Coin |
| Transaction Speed | High |
| Pros |
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| Cons |
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| Price | $2.50 |
| 24h % | 0.37 % |
| 7d % | 6.94 % |
| 30d % | 120.92 % |
| 60d % | 355.39 % |
| 1y % | 311.74 % |
| Official Links | Website |
| Socials | X |
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