Interest in Ripple (XRP) is declining. Key on-chain indicators suggest a possible weakening of price in the near term.
We examine the factors that could lead to further declines in Ripple's (XRP) price in the upcoming trading sessions amid decreasing market optimism.
Ripple traders are rushing to exit.
The Estimated Leverage Ratio (ELR) for XRP on Binance is declining. This confirms the weakening of investor confidence and reduced risk appetite. According to CryptoQuant, the current ELR is 0.36 - the lowest weekly value in the last month.
ELR shows the average leverage that traders are using on the cryptocurrency exchange. Its decline indicates that investors are becoming more cautious about the token's short-term prospects. They are avoiding high-leverage positions that could amplify potential losses.
ELR Ratio. Source: CryptoQuant
The same trend is observed in the spot market. According to Coinglass, since July 29, Ripple has been recording negative net flows. The figure exceeded $222 million, confirming the dominance of sellers.
Negative net flows in the spot market indicate that traders are actively selling the token to take profits, while the number of buyers is decreasing. This situation could exacerbate the decline of XRP as demand diminishes while supply increases.
Net XRP flows in the spot market. Source: Coinglass
XRP bears are approaching $2.71
With increasing selling pressure, XRP may drop to $2.71. If this level does not hold, a sharper decline to $2.50 is possible. On the other hand, if buying momentum strengthens, a breakout above $3 is not excluded. Successfully overcoming this level could clear the way for a rally to $3.39.
Ripple price analysis. Source: TradingView
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