XRP has experienced a significant correction of nearly 30% within the last 30 days, with its price lingering below $3 for almost a month. The Directional Movement Index (DMI) indicates a strong downtrend, notably with the Average Directional Index (ADX) climbing above 35, pointing towards heightened bearish momentum.
Although there is a possibility of a reversal on the horizon if the SEC resolves its lawsuit against XRP, potentially sparking a rally towards crucial resistance levels.
XRP's DMI currently reflects a lack of a clear direction, with its ADX now standing at 36.98, a substantial increase from just four days ago when it was at 15.89.
The ADX is a key indicator of trend strength, shedding light on the intensity of the trend rather than its direction. An ADX above 25 typically signifies a strong trend, while below 20 suggests a weaker or non-trending market.
With XRP's ADX rapidly escalating above 35, it indicates that the ongoing downtrend is gaining momentum, showcasing stronger conviction from market participants, making the continuing trend more probable.
The Positive Directional Indicator (+DI) for XRP is currently at 11.4, down from its recent peak of 15.1, signaling a decline in bullish pressure. Conversely, the Negative Directional Indicator (-DI) has dropped from 37.2 to 21.6, indicating a decrease in bearish momentum.
Despite the lessening bearish pressure, the fact that the -DI remains above the +DI confirms the persistence of the downtrend. The expanding gap between the ADX and the directional indicators hints at a robust and enduring downward trend.
The recent drop in the number of 7-day XRP Active Addresses from 407,000 to around 186,000 marked the lowest level since November 2024. This metric is significant as it mirrors user engagement and network activity, reflecting the demand for XRP.
Following this decline, XRP Active Addresses have started to show signs of recovery, rising to 236,000, an increase of 26.8% in the last week. This uptick suggests a growing user activity and renewed interest in the network.
In terms of price action, XRP's EMA lines currently suggest a bearish setup, with short-term lines positioned below long-term ones. The coin has been trading below $3 since early February, hinting at sustained downward momentum.
The outlook could change if the SEC drops its lawsuit against XRP in March. Recent developments indicate a shift in regulatory pressure, with cases against other platforms being dropped. Should this happen, XRP may witness an uptrend, testing resistance levels at $2.36 and $2.52, potentially paving the way for a bullish reversal.