The cryptocurrency market has witnessed several significant events in recent weeks, but Ripple’s XRP has remained relatively muted, failing to capitalize on the positive news. Despite its strong fundamentals, XRP’s performance has been limited by its high correlation with Bitcoin (BTC), which has been experiencing a downturn.

In July, it was reported that Donald Trump’s campaign had raised over $4 million in donations through digital tokens, including XRP. However, this news failed to have a significant impact on XRP’s price. Similarly, the transfer of 33 million XRP tokens to a Binance wallet on August 22 did not result in any notable price movement. Even the announcement of plans to introduce smart contracts to the XRP Ledger (XRPL) failed to spark a significant price response, with XRP’s price dropping by 3% instead.

Ripple’s Ties to Bitcoin: A Double-Edged Sword

Ripple’s strong correlation with Bitcoin, with a correlation coefficient of 0.72, has resulted in a muted response to positive news. This correlation has been a double-edged sword for XRP, as it has limited the token’s ability to capitalize on its own strengths. In the past 24 hours, Bitcoin’s price has dropped by 4%, and XRP has followed suit with a 3% decline.

Despite this decline, XRP’s trading volume has surged by 39%, indicating a negative divergence. This divergence suggests increasing selling pressure, which could lead to further declines in XRP’s price. The negative price-to-daily active address divergence further confirms the increase in selling activity, with a metric of -63.81 signaling diminished participation in buying, selling, or holding XRP.

XRP Price Prediction: Further Devaluation Ahead

At the time of writing, XRP is trading at $0.55, and its 12-hour chart suggests further decline. The token’s MACD line (blue) sits below its signal line (orange) and the zero line, indicating a strong bearish trend. This setup signals a continued downtrend unless a reversal occurs, prompting traders to either avoid the market or consider short positions.

Furthermore, XRP’s bull-bear power, measured by the Elder-Ray Index, indicates that sellers dominate the market. As of now, the index stands at -0.035, having remained negative since August 26, indicating bearish control.

If bears continue to overpower bulls, XRP’s price could drop to $0.52. Should this level fail to hold, a further decline to $0.46 could follow. On the other hand, if market sentiment shifts to bullish, XRP could rise to $0.56.

Key Takeaways:

• XRP’s strong correlation with Bitcoin has limited its ability to capitalize on positive news
• The token’s price has remained relatively muted despite several significant events
• XRP’s trading volume has surged by 39%, indicating a negative divergence
• The negative price-to-daily active address divergence confirms the increase in selling activity
• XRP’s price could drop to $0.52 or $0.46 if bears continue to dominate the market
• A shift in market sentiment could lead to a rise in XRP’s price to $0.56.