On Sunday, November 17, the price of XRP broke through $1 for the first time in 3 years. At this historic moment, the trading volume of XRP rose to $24 billion, but at the time of writing this, its value has declined.
This decline indicates that interest in altcoins is not as high as it once was. But how will this affect the price of XRP?
Market interest in XRP is quickly cooling
According to sentiment, XRP's trading volume recently peaked at $24.4 billion, but has since dropped significantly to $7 billion, a decrease of $17 billion in buying and selling activity.
From a technical perspective, an increase in trading volume along with a price increase indicates a strong and sustainable uptrend. However, if the price rises while the trading volume decreases, it suggests a weakening of momentum and a potential reversal.
This is consistent with XRP's current situation, as the decrease in trading volume indicates a decline in market participation. If this trend continues, XRP's price may struggle to maintain its uptrend and could risk falling below $1 in the short term.
Additionally, social dominance has also decreased. Social dominance analyzes the ratio of discussions about a specific cryptocurrency compared to the total discussions across various cryptocurrency-related platforms, highlighting how much attention the asset is receiving within the crypto community.
An increase in social dominance indicates higher interest or attention towards the asset. Conversely, a decrease in social dominance suggests the asset is losing visibility and relevance in the market.
A few days ago, XRP's social dominance was nearly 13%. At the time of writing, it has dropped to 2.34%, indicating a decline in interest in the token. If this trend continues and XRP's trading volume also decreases, the price could potentially decline.
XRP Price Prediction: Potential Correction Below $1
According to the daily chart, XRP previously experienced a surge in buying pressure. This was evident from the Money Flow Index (MFI) indicator, which measures the level of capital inflow into the cryptocurrency.
However, at the time of writing, the MFI value has declined from its peak. This decline suggests that buying pressure is no longer as strong as it was a few days ago. Therefore, if this metric continues to decrease, XRP's price could potentially fall to $0.80.
However, if XRP's trading volume rises back into the double digits, this trend could change. In that case, the cryptocurrency's value could potentially increase to $1.26.
