XRP's upward trend has stalled after surging 7% - Can the price breakout as we enter Q3?

Since hitting a high closing level on Monday, the price of XRP seems to have entered a phase of volatility within a narrow range, reflecting the market's caution. This sideways volatility indicates that investors are waiting for a clear signal before making significant decisions.

However, the interesting thing is that during this consolidation phase, long-term holders (LTH) are increasing their attention and seeing this as a strategic buying opportunity. The short-term stability has created an ideal space for long-term investors, who believe that prices will have strong growth potential when the market recovers.

The rise of XRP is stalled after a 7% surge

After the announcement of a ceasefire between Israel and Iran on Monday, market sentiment improved positively, helping the price of XRP surge by 7% that day. However, this upward momentum quickly lost steam over the past two days, as the price of XRP stabilized and the altcoin trend moved sideways. Both buyers and sellers have been unable to gain a decisive advantage in the short term, resulting in a stalemate.

The technical indicators also reflect this tug-of-war. Specifically, the RSI of XRP has been fluctuating steadily since Tuesday, indicating a balance between buying and selling pressure. At the time of writing, the RSI of XRP is at 49.97, maintaining around the neutral level of 50 since the beginning of the week, which suggests that the market still lacks a clear trend.

XRP RSI | Source: TradingViewWhen the RSI of an asset remains stable like this, it is a sign of hesitation in the market, as neither the buyers nor the sellers have been able to gain an advantage.

In addition, the Average True Range (ATR) of XRP has also been steadily decreasing over the past period. At the time of reporting, the ATR of XRP is at 0.1, indicating a narrowing of the price volatility.

XRP ATR | Source: TradingView ATR is an indicator that measures the volatility of price over a certain period of time. When the ATR indicator decreases, it usually indicates that the level of price volatility is narrowing, and the strength of market momentum tends to weaken. This is a sign of a market lacking strong breakouts, where price movements are no longer sharp or there are no significant spikes, causing investors to feel hesitant and find it difficult to determine the next direction.

LTH demonstrates resilience

Data from Glassnode shows that the Liveliness index of XRP has been continuously declining, even as the coin faces many difficulties in the context of a weak overall market in recent weeks. The Liveliness index tracks the movement of tokens that have not been active for a long time, and the decline in this index indicates that LTH are maintaining their confidence and are not in a hurry to sell off XRP.

Recently, the Liveliness index of XRP has dropped to its lowest level of the year at 0.808, indicating a significant decrease in selling activity from LTHs. When Liveliness decreases, it means that tokens are not being moved or sold much anymore; instead, long-term investors are holding onto their assets, even moving them off exchanges for long-term holding.

The Liveliness index of XRP | Source: GlassnodeThe Liveliness index measures the movement of long-held tokens by calculating the ratio of the days coins are spent (CDD) to the total number of days coins are accumulated. When this index increases, it means long-term investors are selling or moving their assets, which usually signals profit-taking action. Conversely, when Liveliness decreases, it indicates that long-term investors are maintaining their resolve and choosing to hold their assets amidst an unstable market.

For XRP, the decrease in Liveliness indicates that although the current market shows signs of stagnation, the confidence of LTHs remains strong. If this trend continues, it could create a strong premise for a price increase as market sentiment improves and favorable factors emerge.

Can XRP Break Out?

The strong increase in accumulation by LTH, along with the positive shift in the overall market sentiment towards risk assets, could open up opportunities for XRP to break out of its current trading range and begin a sustainable growth trend as Q3 begins.

Increased buying demand could push the price of XRP above the resistance level of $2.21 and approach the level of $2.29.

However, if the profit-taking activity continues, the value of XRP may drop to $2.08. If this support level is not defended, it could open up the possibility of a deeper decline to $1.99.

XRP Price Chart 1 Day | Source: TradingViewAnnie