Altcoin
XRP Price Prediction; Recovery to $0.55 looms as network transactions increase by 120,000
XRP price fell below $0.50 on May 11, down 5% over 24 hours, but spikes in network usage suggest the next rebound phase may be imminent.
XRP Price Drops 12% as Altcoin Markets Crash
XRP had an extraordinary start to May 2024, which saw it rally 15% between May 1st and May 7th. But since then, XRP’s price action has been subject to intense volatility, mirroring the broader trend in the altcoin market.
At the time of writing on May 11, XRP price is precariously above the key $0.50 support level. Zooming out, it reflects a 12% decline from the weekly high of $0.57 recorded on Monday.
In comparison, to the broader altcoin markets, which fell by only 7% during that period, the price of XRP performed worse than the market average. This disappointing performance can be attributed to recent developments regarding Ripple’s long-running lawsuit with the SEC.
Earlier this week, the SEC reaffirmed its recommendation of a hefty $2 billion fine on Ripple, after the company appealed to US District Judge Annalisa Torres for a much more lenient fine of $10 million dollars.
XRP network transactions increased by 120,000 this week
Analysts expect the SEC’s $2 billion recommendation to be upheld by the judge. Arguably, negative investor reaction to this development contributed significantly to the 12% decline that saw XPR prices plummet below $0.50 on May 11.
Recall that XRP had initially beaten the market average with a 15% rally in the first week of May. On the bright side, on-chain data trends show that the fundamental bullish catalysts that drove XRP’s price action in early May are still in play despite the downside headwinds generated by the $2 billion slammer SEC dollars.
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A key indicator of this is the Santiment network transaction graph below, which captures the daily count of all transactions executed on the XRP Ledger blockchain.
The chart below shows that at the start of the price decline on May 7, XRP recorded 224,250 transactions. But the network’s activity has been increasing ever since. The latest data shows that the XRP Ledger network recorded 352,910 unique transactions on May 10, reflecting an increase of 128,660 transactions over the week.
Historically, a large increase in a blockchain network’s daily transactions has often been bullish for the price of the underlying native coin for two main reasons.
A significant increase in daily transactions indicates the growing adoption and use of the blockchain network. This suggests that more users and entities are actively interacting with the network, using its features and services.
Such increased activity typically reflects confidence in the network’s capabilities and could attract more investors and users, ultimately increasing demand.
XRP Price Forecast: Imminent Bounce to $0.55?
At the time of publication on May 11, the price of XRP is trading for $0.50 a piece. However, the surge of 130,000 transactions puts the XRP price in prime position for a quick rebound towards $0.55 in the coming days.
Looking at the base of the Bollinger band technical indicator, the XRP price recovery prospect now faces strong resistance at the $0.52 level. If the bulls can break out of the selling wall of the 20-day SMA, a quick rebound above $0.55 could be on the cards, as expected.
Conversely, bears need to force a decline below $0.45 to take control of XRP’s short-term market momentum. However, as illustrated by the lower bound Bollinger band indicators, the buying wall of support in the $0.49 territory could prove discouraging.
Disclaimer: This content is informational and should not be considered financial advice. The opinions expressed in this article may include the personal opinions of the author and do not reflect the opinion of The Crypto Basic. Readers are encouraged to do thorough research before making any investment decisions. Crypto Basic is not responsible for any financial losses.
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