XRP could be rising today due to the growing probability of rate cuts in September, but obstacles persist. Analyst Ali Martinez points out that the market value to realized value (MVRV) has created a death cross. This signal can be observed with the movement of the 50-day simple moving average (SMA) below that of the 200-day.
The MVRV shows whether holders are accumulating profits or losses. Currently, the crossover suggests that those who bought XRP in the last 50 days are making less profit than long-term holders. When short-term holders are in the red like this, there is a higher probability that they will sell.
Although Martinez did not mention it, this death cross has been the cause of the price trading in the red. For example, when it occurred in mid-May, the price of XRP fell from $2.65 to $1.90, less than six weeks later.
This means that, even with today's gains, the price of Ripple is still not safe. Furthermore, this death cross seems to have scared some traders, who have been moving coins to exchanges for the last two consecutive days.
Coinglass data shows that, for five days, cryptocurrencies have been flowing out of exchanges. This changed on Sunday, when net flows reached $27 million. Today, the trend continues, considering the $15 million inflow at the time of this publication.
This means that, in two days, 44 million XRP have been transferred to exchange platforms. These coins were not affected even during last week's drop. This means that the price of XRP could continue to decline.
There are indications that, even with difficulties, $4 remains a possible target for Ripple. This is due to two factors: a descending wedge and firm support.
The descending wedge is the most significant. It indicates that the bearish trend is not strong. In this case, the price of Ripple could simply regain profits. The peak of this pattern, a 24% increase, indicates that XRP could reach $4 if buyers come in now.
There is also the fact that XRP bulls are struggling to maintain the price of $3. However, their control could be unstable because not the entire market is gaining. This means that unless XRP reaches the 78.6% Fibonacci level of $3.22, the bears have a gap they can exploit.
The ADX line is another reason why bears should be concerned. When it falls as it is currently doing, it indicates that the drop contained in the descending wedge is weak. Therefore, the price of XRP could avoid the crash mentioned by the MVRV. This also makes $4 a possible target to reach.
