- XRP consumption age rises to all-time high on May 1st
- This suggests that we have reached the bottom of the local price on the chart.
XRP’s consumption age indicator is in the news today after rising to its highest level during the intraday trading session on May 1, according to Santiment data.
🤑 #XRPLedger We are seeing a large amount of dormant tokens being moved towards the opening in May. Our spending token age indicator shows that the spike in old coins being moved was strikingly similar compared to his April 13th spike, just before the market crashed. $XRP -16% drop in… pic.twitter.com/vHpaDuJNaE
— Santiment (@santimentfeed) May 2, 2024
The consumption period of an asset tracks the movement of its dormant coins. This indicator is important because it provides insight into changes in the behavior of long-term holders. This group of crypto investors rarely moves dormant coins, but when they do, they often cause changes in market trends.
If the metric goes up, it means that a large number of tokens are changing hands after being left idle for a long time. On the other hand, if it falls, it means that the idle coins remain unmoved.
This indicator is a good marker to indicate the highest or lowest local price of an asset, depending on the price movement after such fluctuations.
Is a rise in XRP expected?
According to Santiment, 130 billion dormant XRP tokens were moved on May 1st. This was followed by an increase in the price of XRP. At the time of writing, the altcoin was valued at $0.52, and the price has increased by 8% in just two days. coin market cap.
The spike in XRP’s consumption age index and the subsequent price increase may suggest that the price bottom was reached on May 1st, when the token price fell to a low of $0.48. Following this, the altcoin started an uptrend on the charts.
This was confirmed by a significant drop in XRP’s network realized profit and loss (NPL) indicator on the same day. This indicator measures the difference between the price at which a token was last used and its current market price.
A significant drop in this indicator indicates a short-term capitulation of paper hands and a surge in new demand. This often means that prices have hit bottom, as declines in NPLs tend to coincide with localized rebounds or periods of price recovery.
On May 1st, XRP’s NPLs fell to -54 million, the lowest level since December 2022.
Source: Santiment
Realistic or not, the market capitalization of XRP converted to BTC is as follows:
XRP expects sustained demand
When evaluating the price movement of XRP on the 1-day chart, it was confirmed that the price may rise in the short term. In fact, as of this writing, the token’s key momentum indicators are rising, indicating a surge in demand.
For example, XRP’s Chaikin Money Flow (CMF), which tracks the flow of funds into and out of assets, was trending upward at 0.28. A positive CMF value above zero indicates market strength and is a sign of low capital flight.
