XRP Elliott Wave hints at correction – Why $2.34 support matters next
XRP Elliott Wave analysis suggests a wave 2 correction, with $2.33 as the key level to watch.
The MVRV at 2.9 signals neutral sentiment, well below levels that typically mark market tops.
After rallying to hit a local high of $2.65, Ripple [XRP] has slightly retraced on its price charts. The altcoin has dropped for two consecutive days to a low of $2.49.
At press time, XRP traded at $2.50, down 3.31% on the daily chart.
Crypto analyst Man of Bitcoin suggested that XRP may have already topped locally, citing the Elliott Wave structure.
Source: X
According to the analyst, if the altcoin breaks below the descending trend line, it would indicate that the correction is already starting.
Looking at the Elliott Wave analysis, the current support for the corrective wave 2 is building. Wave 2 is a corrective phase that leads to a pullback erasing most gains made during wave 1.
This pullback emerges especially when the market starts experiencing a price upswing and investors start to take profit.
The support zone for wave 2 lies between $2.19 and $1.79, with $2.33 acting as the next key validation level for downside continuation.
Price rally not backed by demand, data shows
According to AMBCrypto's analysis, XRP's recent rally was not backed by actual demand but the speculative move by speculative buyers.
Source: Santiment
For starters, looking at XRP's Price–DAA Divergence, it has remained negative throughout the past week despite the price rally.
A negative divergence creates a bearish signal interpreted as unsustainable price movement that's not supported by a growing user base. Thus, prices have grown faster than the actual demand, creating a mismatch.
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Such a mismatch leads to lower prices.
Source: CryptoQuant
Adding weight to the demand concerns, XRP's NVT Ratio spiked from 99 to 207, signaling that valuation outpaced transaction volume.
A rising NVT ratio implies that markets are further confirming that the recent price uptrend was not backed by strong demand, which usually leads to price correction.
Although XRP prices are not currently supported by a growing user base, the altcoin's MVRV suggests that a top is unlikely and the retrace will not result in strong losses.
At 2.9 MVRV, XRP remains in a neutral zone. Historically, a local top has occurred around 3.2 while a market top has emerged above 3.5.
Source: Santiment
So, what's next for XRP?
The recent decline in XRP's price appears to be primarily driven by a broader market pullback. According to analyst Man of Bitcoin, a drop to $2.19 seems unlikely at this stage.
If the downward trend persists, XRP may see a pullback to around $2.34 before possibly making another upward move.
Conversely, if the retracement is influenced by the overall market sentiment, we could witness a rebound that allows XRP to reclaim the $2.56 level.
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