Today, the market cap of Ripple reached $37.39 billion, once again overtaking BNB temporarily as the fourth largest crypto asset by market capitalization.
This flipping isn’t caused by the price of XRP increasing, as it has been stagnant since July 25, but by the price of BNB temporarily slipping while XRP remained still.
Even though this may appear to be positive news for Ripple, not much positivity can be seen ahead.
Since the SEC ruling, we haven’t seen much activity, and the price has been moving mostly sideways with larger volatility at first but in a stagnant manner from July 25. We could even see a further decline if the token doesn’t regain traction.
From its July 13 peak of $0.93 to its lowest point of $0.68, we have seen a decrease of 27.38%. A descending triangle was formed, and with the price coming close to its apex, a breakout is soon expected.
Considering that the structure is descending, indicating large sellers’ pressure, a breakout to the downside looks more likely.
On the Ripple blockchain network, we also haven’t seen much activity regarding large token holders.
Across every major cohort, we have seen a diminishing interest compared to the previous period. The supply is still in an uptrend, but looking at the more recent data (from July 13), we can see a downtrend in the first two major cohorts, 1M> and 100K>.
Real volume declined even more drastically from its July peak. It came down from $9.97B on 13 to $242M as of today, July 31.
Transaction data also shows a calm picture that supports the low volatility we have seen on the price chart, but more importantly, it doesn’t show much on-chain activity.
From its all-time high of $3.50 back on January 2, 2018, the price of XRP has been in its multi-year correction. This bull cycle ended at a lower high of $1.98 on April 14, 2021. With the July 13 peak of this year making a third interaction with the descending trendline seen on the daily logarithmic chart from Binance, we can confirm its validity.
In conjunction with the slightly ascending support level from March 21, 2020, when the previous bully cycle started, a large triangle formed inside which the price of Ripple has been undergoing its correction.
There are two scenarios ahead. The first one is that the multi-year correction will end up as a complex WXYXZ five-wave correction, and the second one is that it already ended on wave Y.
In a bearish scenario, the rise from June 18, 2022, was the second wave X that now ended in July on the third interaction with the triangle’s resistance level. In that case, the price of XRP is now headed for the completion of wave Z, which will likely be an interaction with the triangle’s support level at $0.39.
Alternatively, the Y wave completed the correction on June 18, 2022, and the upside that followed was the next starting bull cycle. If this is true, then instead of the presented ABC correction you can see on the chart above, we have seen the first three waves from the five-wave impulse. What would lead is the 4-wave sideways correction, and as the price ends, consolidating another higher high above July’s one.
A bearish scenario is more likely at this point, although the sideways movement seen from July 13 could be interpreted as the wave 4 out of the five-wave impulse in a bullish scenario.
Since July 13, the price of XRP has declined; from the 25, it was moving sideways with low volatility. There isn’t any on-chain activity to indicate further price progression, but the charts are mostly bearish.
If we see a breakout to the downside from descending triangle formed in mid-July, then a bearish scenario presented above would be in play, and we could see the price of Ripple headed towards the $0.39 area.
On the other hand, if suddenly large token holders start buying up the token and a new influx of capital enters the market, a breakout to the upside could indicate that the price of XRP has indeed started its bullish cycle.
Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.