XRP, the digital currency, experienced a significant decline in price on May 11, dropping by 5% within a 24-hour period. However, despite this decline, there are indications that a rebound phase could be imminent due to spikes in network usage.
XRP had a strong start to May 2024, with a 15% rally between May 1 and May 7. However, since then, the price of XRP has been highly volatile, following the broader trend in the altcoin market.
Currently, the XRP price is just above the $0.50 support level, reflecting a 12% decline from its weekly peak of $0.57 on Monday. In comparison to the overall altcoin market, which only saw a 7% decline during this period, XRP’s performance has been worse than the market average. This underwhelming performance can be attributed to the ongoing lawsuit between Ripple and the SEC.
The SEC recently recommended a $2 billion fine on Ripple, which the firm appealed, requesting a much lower penalty of $10 million. Analysts anticipate that the judge will uphold the $2 billion recommendation, and investors’ negative reaction to this development has contributed to XRP’s price decline.
However, despite these challenges, on-chain data shows that the fundamental bullish factors that drove XRP’s price action in early May are still at play. This is evident in the surge of network transactions on the XRP Ledger blockchain. While the price dip on May 7 saw 224,250 transactions, network activity has been increasing since then, with 352,910 unique transactions recorded on May 10, indicating a rise of 128,660 transactions during the week.
Historically, a significant increase in daily transactions on a blockchain network has been a bullish sign for the native coin’s price. It indicates growing adoption and usage of the network, which boosts confidence and attracts more investors and users.
Based on these factors, there is a forecast for an imminent rebound in XRP’s price, with a potential target of $0.55. However, there is major resistance at the $0.52 level that needs to be overcome. On the downside, a downturn below $0.45 would give control to the bears, but there is strong support at the $0.49 level.
It is important to note that this article is for informational purposes only and should not be considered financial advice. Readers are advised to conduct their own research before making any investment decisions.