XRP faces risk of deeper correction, analyst cites MVRV death cross and whale selloff

XRP is showing signs of weakness following a notable pullback from its recent high as bearish indicators and whale offloading warn of deeper risk.

XRP ( XRP ) is trading at $2.94, down 3.7% in the last 24 hours and nearly 19% off its all-time high of $3.65 set on July 18. While still up 29% over the past month, short-term signals are raising concerns about a deeper correction.

Analyst flags XRP warning signals

According to an Aug. 6 post on X by analyst Ali Martinez, the Tom DeMark Sequential indicator recently flashed a sell signal on XRP’s 3-day chart. This signal appeared near the local top and has so far aligned with the ongoing decline.

Martinez also mentioned whale activity, pointing out that in the last few days, more than 720 million XRP have been offloaded. The bearish outlook is supported by this degree of selling pressure. 

Adding to the concern is the recent appearance of a “death cross” in XRP’s MVRV ratio, a metric that compares market value to realized value. This cross has historically indicated downside risk, showing that traders are probably sitting on smaller profits.

While the $3 mark has acted as support, Martinez sees $2.80 as only a temporary buffer. He believes stronger support lies closer to the $2.48 level, a drop that would mark a sharper correction from recent levels.

XRP technical analysis

On the daily chart, there appears to be less volatility as the price is moving sideways just below the middle of its Bollinger Bands. The relative strength index is at 48.8, which is neutral but could turn bearish if it keeps moving lower.

XRP daily chart. Credit: crypto.news

Both the Momentum and MACD indicators are in negative territory, which suggests that there may be underlying selling pressure. Additionally, short-term moving averages are beginning to flip bearish.

Resistance is currently being provided by the 10-day and 20-day exponential and simple moving averages. Longer-term averages, like the 50, 100, and 200-day, are still in a bullish alignment, indicating that XRP hasn’t yet completely broken out of its larger uptrend.

Further declines toward $2.48 could be triggered by a sustained move below $2.80, particularly if sell-side volume spikes. XRP may resume its upward trend toward $3.20 to $3.30 if it maintains above $2.80 and recovers the $3 mark with increasing volume.