On December 10, the price of Ripple (XRP) temporarily fell below $2, sparking speculation that its prolonged bullish trend could be ending. However, bearish concerns have been short-lived. XRP has recovered strongly, recording an 8% increase in the last 24 hours.
Interestingly, several under-the-radar indicators suggest that XRP’s rally over the year may still have room to grow. Here’s how.
Ripple Stakeholders Send More Tokens into Circulation
The average dollar investment age (MDIA) is an on-chain metric that suggests the price of XRP could continue to trade higher. MDIA represents the average age of all tokens on a blockchain, weighted by their purchase value.
A rising MDIA indicates that currencies, normally held by key stakeholders, have remained stagnant. Historically, this inactivity has made it difficult for the altcoin price to gain momentum. However, currently XRP’s MDIA has fallen to a remarkably low level. This metric, which reflects the average age of traded tokens, signals the recirculation of previously dormant assets.
Unlike a high MDIA, which implies stagnation, a low MDIA is considered a bullish signal. The decline shows that dormant XRP tokens have returned to circulation, boosting trading activity and liquidity.
Average investment age in ripple dollars. Source: Sentiment
In addition to the MDIAs, the Taker Buy Ratio also suggests the possibility of further gains in the price of XRP. This ratio measures the proportion of executed buy orders compared to the total transactions in the derivatives market.
A Buyer Ratio above 0.5 reflects growing bullish sentiment, suggesting buyers are gaining control. According to data from CryptoQuant, the metric has risen to 0.55, highlighting a significant increase in buying pressure around XRP.
If this trend continues, it could indicate strong optimism in the market, which could lead XRP to new price levels in the coming sessions. However, a drop below this threshold would indicate bearish sentiment, warranting caution.
Ripple Taker Purchase Ratio. Source: CryptoQuant
XRP Price Prediction: Bulls Are Back in Control
On the 4-hour chart, XRP price briefly fell below the 20 and 50 exponential moving averages (EMA) on December 12. The EMA is a technical indicator that measures trends.
When the price falls below these indicators, it typically indicates a bearish trend, while a rise above them indicates bullish momentum. The recent recession suggested a possible further correction for XRP.
However, as of now the bulls have regained control, pushing the price back above these lines. This change signals a return of bullish momentum, with XRP potentially rising to $2.90 in the near term.
4 hour ripple analysis. Source: TradingView
If buying pressure intensifies, it could rise towards $3.50. On the other hand, if the number of idle tokens entering circulation drops, this may not happen and the token could drop to $1.93.
