XRP Faces Pressure After July Peak; MVRV Death Cross Raises Concerns

After a notable rally in July, XRP is now showing signs of a decline. Trading close to $2.99, it has retreated approximately 17% from the peak of $3.65 on July 18. Despite a 4% rise in the past day, it remains about 6% below its level from one week ago.

The trend reflects short-term changes in a market full of uncertainty. Also, the on-chain MVRV ratio is now bearish, which analysts see as a possible sign of deeper price falls.

What the Death Cross on the MVRV Indicator Means for XRP?

The MVRV ratio compares XRP’s current market value to its realized value. The realized value is the average price at which tokens were last moved on the blockchain. When this ratio goes down, it usually means holders are losing money compared to what they paid, which can lead to more selling.

On August 4, crypto analyst Ali Martinez pointed out that XRP’s MVRV ratio showed a “death cross.” This is a bearish signal that happens when a short-term MVRV trend falls below a longer-term one. In the past, this pattern has often been followed by prolonged price declines. This suggests that the market momentum might be turning from positive to negative, causing traders to become more cautious.

Although the death cross does not mean the price will fall sharply, it suggests more losses might come, especially if important support levels fail. This fits with XRP’s recent price decline and needs careful attention.

Changes in Trading Activity

Beyond the shifts in price, XRP’s trading volume has seen a significant decrease, falling more than 23% to $4.83 billion over the past 24 hours. Such a drop in spot market activity typically indicates a decrease in trader enthusiasm or an increase in caution. However, derivatives data from Coinglass presents a contrasting picture. Open interest, representing the total value of active contracts, has grown approximately 3% to $7.46 billion, despite a 28% decline in derivatives volume to $8.6 billion.

This contrast indicates that traders may be holding onto their positions longer instead of frequently trading, which suggests a careful approach to near-term price changes. This is an important nuance: rising open interest paired with lower volume can mean market participants are waiting for clearer signals before making new moves.

The market appears to be in a temporary hold, as hopes for renewed growth compete with fears of a more significant downturn.

Key Indicators Reflect Uncertain Momentum

Looking at the technical details, XRP faces a critical moment. It is trading slightly under important short-term moving averages. The 10-day and 20-day EMAs sit at about $3.02 and $3.01, indicating selling pressure. The relative strength index (RSI) stands close to 51, reflecting a balanced state without a clear advantage for buyers or sellers.

The RSI is approaching an oversold threshold near 14, which could hint at a short-term bounce. Yet, the general trend still appears fragile. Support from the longer-term 50-day ($2.79) and 200-day ($2.34) EMAs suggests a more hopeful outlook beyond the immediate volatility.

As long as XRP stays above $2.95, consolidation may occur before an effort to surpass resistance at $3.20. Conversely, falling below $2.75 could lead to additional downward pressure toward support near $2.50. In light of the MVRV death cross, these technical markers will be important as traders evaluate XRP’s chances for recovery or ongoing pressure.

An Outlook for XRP

XRP’s recent behavior exemplifies the volatility that often accompanies crypto assets after significant rallies. The presence of a bearish MVRV death cross, combined with declining volume and mixed derivatives data, points to an environment of heightened caution. Buyers and sellers alike are watching to see if key support zones hold firm or give way to broader declines.

There could be a brief bounce according to technical signs, but it’s better to be careful rather than trade aggressively. Right now, the market looks like it’s stabilizing, so keep an eye on on-chain metrics, volume, and prices.