XRP has increased by 5% in the past 24 hours, temporarily escaping the downward pressure that has pulled the price of this coin down over the past week.
While the recent price increase reflects broader improvements across the cryptocurrency market, on-chain data shows that the specific trends of each asset could drive XRP's recovery.
XRP Sentiment Changes as Buying Pressure in Futures Contracts Increases
An important indicator showing this change is XRP's buy/sell ratio, which closed in the green yesterday. According to CryptoQuant, this is the first time this index has closed positively since July 10, confirming a positive shift in market sentiment.
The buy-sell ratio of an asset measures the ratio of buying and selling volume in that asset's futures market. A value above 1 indicates that buying volume exceeds selling, while a value below 1 indicates that many futures traders are selling their holdings.
The slight increase in XRP's buy/sell ratio indicates that selling pressure in the futures market is slowing down. This suggests that the pessimistic sentiment among futures market participants has weakened — a trend that, if sustained, could further support XRP's uptrend.
Another notable trend is the steady decline in XRP's liveliness since the beginning of August. According to Glassnode, this index closed on August 3 at 0.8150, down from 0.8152 recorded on August 1.
The Liveliness index tracks the fluctuations of long-term/ dormant tokens held. This index is calculated by measuring the ratio of the number of days a coin has been destroyed of an asset compared to the total number of days the coin has been accumulated. When this index increases, it means that long-term holders are moving or selling their coins.
On the other hand, when prices drop like this, profit-taking activity may slow down as key holders return to accumulation mode after a period of selling pressure.
Will the Resistance Level Prevent the Uptrend or Trigger a Downtrend to $2.87?
The combination of reduced sell-off and increased demand for futures contracts could help XRP stabilize above the $3 price level in the near future. If accumulation strengthens, this altcoin could extend its gains to $3.22. Successfully breaking through this barrier could open up opportunities for a price increase to $3.33.
If not, this altcoin could reverse its uptrend and drop to a low of $2.87, continuing the recent downward trend.
