Investors eyeing Ripple (XRP) may see an opportunity to “buy the dip” as the altcoin currently appears undervalued. Over the past month, XRP has dropped nearly 10% in value, creating a negative market value to realized value (MVRV) ratio. This has led some to consider the asset as a potential bargain. However, technical indicators suggest the downturn is not yet over, and buying into XRP at this stage could hurt your investments.
Is Ripple (XRP) Undervalued?
XRP’s recent price decline has resulted in its MVRV ratios for the last 30 and 90 days standing at -3.85 and -2.66, respectively. These figures indicate that the asset is trading at a lower price than the average cost of XRP tokens in circulation, signaling potential undervaluation. For traders looking to buy the altcoin below its historical cost basis, this could seem like an attractive entry point.
The Bearish Sentiment Behind XRP
Despite appearing undervalued, Ripple is facing a wave of negative sentiment. XRP’s weighted sentiment score currently sits at -0.18, reflecting negative emotions such as fear, uncertainty, and doubt (FUD) within the community. Social media discussions around XRP have been dominated by pessimism, indicating that the asset’s price may continue to decline in the near future.
Technical Indicators Reinforce Bearish Outlook
XRP’s technical analysis also paints a bearish picture. The Elder-Ray Index (ERI), a key tool for tracking buying and selling pressure, has shown persistent negative values since August 27, signaling that sellers are dominating the market. This selling pressure suggests that the asset’s price decline could continue.
Additionally, the Directional Movement Index (DMI) highlights that the negative directional indicator (red) is outpacing the positive directional indicator (blue), further reinforcing the notion that XRP remains in a downtrend.
XRP Price Prediction: More Decline on the Horizon?
With continued selling pressure and negative sentiment, XRP risks breaking key support levels. If its current trajectory persists, XRP could fall to $0.45 and potentially further to $0.38. However, a shift in market sentiment from negative to positive could push XRP back up, with a price target of $0.65.
Conclusion: Proceed with Caution
While XRP may look like an undervalued opportunity, investors should be cautious. The technical indicators suggest that the downturn is far from over, and Ripple could face further declines in the coming weeks. Before jumping into a position, consider the risks and keep an eye on market sentiment and key support levels.
For the latest updates and price predictions on Ripple (XRP), stay informed as the market evolves