XRP’s price experienced a significant decline of 12% as altcoin markets faced a downturn. Despite starting the month with a 15% rally, XRP has since been subjected to volatile price action, following the broader trend in the altcoin market. As of May 11, the XRP price is hovering just above the $0.50 support level, representing a 12% drop from its weekly peak of $0.57 on Monday.
In comparison to the general altcoin markets, which only saw a 7% decline during the same period, XRP’s price has underperformed. This lackluster performance can be attributed to ongoing developments surrounding Ripple’s legal battle with the SEC. The SEC recently reiterated its recommendation of a $2 billion fine against Ripple, after the company had appealed for a much lower $10 million penalty from the US District Judge Annalisa Torres.
Investor sentiment has likely been negatively affected by this news, leading to the 12% dip that pushed XRP’s price below $0.50. However, despite the bearish headwinds caused by the SEC’s ruling, on-chain data indicates that the fundamental factors that drove XRP’s price action in early May are still in play.
Santiment’s Network Transactions chart reveals a significant increase in network activity on the XRP Ledger blockchain. On May 7, when the price dip began, XRP recorded 224,250 transactions. However, since then, network activity has been on the rise. The latest data shows that the XRP Ledger network recorded 352,910 unique transactions on May 10, indicating a week-over-week increase of 128,660 transactions.
Historically, a surge in daily transactions on a blockchain network has been a bullish indicator for the native coin’s price for two main reasons. Firstly, it signifies an increase in adoption and usage of the network, indicating growing confidence in its capabilities. Secondly, it can attract more investors and users, driving up demand for the coin.
As for XRP’s price forecast, it is currently trading at $0.50, but the surge in transactions positions it for a potential rebound towards $0.55 in the coming days. The Bollinger band technical indicator suggests that the $0.52 level will pose significant resistance for the price recovery. If the bulls manage to surpass this level, a quick rebound above $0.55 is likely.
On the other hand, the bears would need to push the price below $0.45 to gain control of the short-term market momentum. However, the support level at $0.49, as indicated by the lower-limit Bollinger band, may prove to be a strong barrier.
It is important to note that this article is for informational purposes only and should not be considered financial advice. The views expressed in this article are solely the author’s and do not reflect the opinion of The Crypto Basic. Readers are advised to conduct thorough research before making any investment decisions, and The Crypto Basic is not liable for any financial losses incurred.