XRP has recently experienced a slowdown in its strong momentum. After a continuous price increase, this altcoin, which had attracted strong investor interest, has begun to lose some of its upward momentum.
Although the price is declining, some market experts believe that the strength of investor support could prevent XRP from experiencing significant short-term losses.
XRP Loses Bitcoin Support
The correlation between XRP and Bitcoin has significantly decreased, dropping to 0.4, which is the lowest level since February this year.
Historically, when this correlation weakens, XRP's price has fallen by 22%. However, the asset recovered after that decline.
With Bitcoin recently reaching an all-time high (ATH), the decrease in correlation can be seen as a signal of weakening support for XRP.
Bitcoin's strong performance can typically boost altcoins, including XRP. However, this disconnection raises concerns that XRP may not be able to leverage Bitcoin's success. As the correlation continues to decrease, XRP may face more challenges in the coming weeks.
In contrast to the weakening correlation with Bitcoin, XRP's investor behavior shows a more stable trend. The total supply of XRP untouched for 3-6 months has been steadily increasing this month.
This suggests that short-term holders are maturing into medium-term holders. This change is a positive signal indicating increasing stability and trust among XRP investors.
The increase in dormant XRP supply indicates that more investors are holding onto the token without selling. This long-term holding behavior can act as a buffer against short-term price fluctuations and help maintain the asset's value during uncertain times.
XRP Price Potential Rebound
Currently, XRP is trading at $2.26, falling below the support level of $2.27 in the past 24 hours. The price has been steadily declining over the past two weeks, attributed to failing to break through the $2.58 resistance.
This suggests that the upward momentum has stagnated and the price may continue to face downward pressure.
If this decline continues, XRP may test the next support level at $2.12, which would mean significant losses for investors. Further decline could increase bearish sentiment and lead to more selling pressure.
However, if investor support strengthens to stabilize the price, XRP could maintain the support level of $2.27. This would open the possibility of rebounding to $2.38 or higher, potentially invalidating the current bearish outlook.
This support could enable a new attempt to break through the $2.58 resistance and potentially push the price even higher.
