As the cryptocurrency market navigates through various ups and downs, XRP, the native token of Ripple, faces the possibility of a significant price downturn in March. Several key metrics and on-chain indicators suggest challenging days ahead for XRP investors. Let’s delve into the factors contributing to this forecast and examine potential scenarios for XRP’s price movement.

Increasing Circulation and Selling Pressure:
Recent on-chain analysis of Ripple’s network reveals a concerning trend: the number of XRP tokens in circulation has been steadily increasing. As of the latest data, XRP’s one-day circulation stands at 1.16 billion tokens. This surge in circulation indicates heightened activity and engagement within the network, potentially leading to increased selling pressure.

Traditionally, low circulation suggests a lower likelihood of selling, which can support price stability. However, the significant increase in XRP circulation suggests that traders may be actively selling the token, particularly after recent price gains. This influx of supply could weigh heavily on XRP’s price in the near term.

Declining Demand and Active Addresses:
In addition to rising circulation, XRP’s network metrics paint a bleak picture for the token’s demand dynamics. On-chain data reveals a decline in the number of active addresses within the Ripple network. The 24-hour active addresses have dropped to 29,800, down from over 35,000 just days ago.

Active addresses serve as a crucial indicator of daily user activity on a blockchain. A decrease in active addresses suggests waning interest and participation, indicating a lack of bullish sentiment among traders. This decline in demand could further exacerbate selling pressure on XRP’s price.

Market Value to Realized Value (MVRV) Ratio:
Another on-chain indicator, the Market Value to Realized Value (MVRV) ratio, provides insights into the fair value of an asset relative to its current price. At present, XRP’s one-day MVRV ratio stands at 1.10%, indicating that the price is below the aggregate cost basis. This suggests that many investors are currently holding unrealized losses.

While a low MVRV ratio typically signals undervaluation and potential accumulation opportunities, XRP’s lackluster demand dynamics cast doubt on this scenario. The token’s weak market sentiment and selling pressure could outweigh any potential accumulation efforts.

Price Outlook and Resistance Levels:
Despite attempts by bulls to push XRP’s price higher, significant hurdles lie ahead. The Relative Strength Index (RSI) currently stands at 57.65, indicating bullish momentum. However, resistance at the $0.61 level presents a formidable barrier for XRP’s price advancement.

If bulls manage to breach this resistance, XRP could target the $0.65 level. Conversely, failure to overcome the $0.61 resistance could trigger a downward movement, potentially pushing XRP’s price below $0.57.

Conclusion:
In conclusion, XRP faces challenging days ahead as increasing circulation, declining demand, and weak market sentiment weigh on its price outlook. While bullish attempts may provide temporary relief, significant resistance levels and selling pressure pose significant obstacles to sustained price growth. Investors and traders should closely monitor XRP’s price movements and market dynamics for potential trading opportunities amidst these uncertain times. XRP’s price outlook remains uncertain, with resistance at $0.61 potentially impeding further upward movement. Traders must exercise caution amid ongoing market volatility.