11.2 C
Manchester
September 19, 2020
Image default
Altcoin

XRP investors are not profiting and the situation can get much worse!

XRP has devalued 94% since its historic high – worse days are ahead.

The fourth cryptocurrency by market value, XRP, has been paralyzed in the past two years. While most other major cryptocurrencies have managed to recover most of their losses, the token promoted by Ripple has lost more than 94% compared to its historic $ 3.40 high.

As a result of this mediocre performance, a large proportion of XRP investors are currently not profiting from their positions in XRP. Unfortunately, this situation could get even worse, as a respected analyst expects the XRP token to suffer a lot in the near future.

“Most investors in XRP are deeply in the red”

Although the most common measure of a cryptocurrency’s value is market capitalization, some observers argue that the capitalization made is a more accurate measure.

According to Ryan Watkins, research analyst at cryptocurrency market data company Messari, the capitalization realized is basically an estimate of the aggregated cost base of a cryptocurrency and is derived from the evaluation of each supply unit at the price that was moved for the last time in jail.

Watkins notes that the realized capitalization of the XRP is $ 43 billion. This means that the average XRP investor bought the cryptocurrency while the price was $ 1.38. Simply put, most XRP investors now fail to profit from the current price of $ 0.19. Watkins said:

“Although little Bitcoin is traded near the greatest historic high ever, the same cannot be said for XRP. Although XRP closed just over $ 1.00 in just 2.1% of its trading days, the estimated aggregate cost base for XRP is $ 1.38. This suggests that most investors in XRP are deeply in the red. “

Analysts say the situation will get worse

Another metric that provides a panoramic view of the current state of the XRP is the inflation rate of the supply in circulation. At the end of last month, another Messari analyst, Florent Moulin, revealed that XRP has an inflation rate of 20%, the highest among other major cryptocurrencies in the past five years. This annual rate is notably 5% higher than that of BTC before halving.

Moulin also compared how much of the maximum supply of the token has been distributed, noting that XRP has only 30% of its maximum supply in circulation, while BTC already has 87.5% of its maximum supply in circulation. The analyst alluded that this high rate of inflation is possibly inflicting downward pressure on the price of XRP.

In the same vein, 45-year-old trade veteran Peter Brandt recently noted that a significant downward trend in the price of XRP is imminent in the coming days and weeks. He specifically stated that XRP had fallen below a main support level that he maintained for a long time. If that support is not recovered, Brandt expects the cryptocurrency to take a deeper dive.

Although the metrics cited by the analysts mentioned above are not perfect, they provide investors with a general idea of ​​why XRP has been a total laggard and the current position of its holders in terms of profits on their investments. With Brandt seeing more weaknesses, XRP holders may experience more losses.

Source: zycrypto

Related posts

Report highlights the need for a Central Bank cryptocurrency after COVID-19

Anupreet Kaur

Ethereum may return to $ 135 despite “favorable April”

Anupreet Kaur

With an increase of 30% in the hashrate this year Ethereum 2.0 will be brought forward

Anupreet Kaur

Leave a Comment