BeInCrypto - Rocket Pool (RPL) closed last month with a vicious 20% price decline after hitting a new 2023 peak of $61 on April 17. A critical analysis of the on-chain data suggests that bearish actions from investors exacerbated the price drop. But where will RPL price bottom out?
Rocket Pool (RPL) is a unique ETH2 staking protocol that allows users to join a decentralized node operator network or run their own nodes with only 16 ETH. Following the successful competition of the Shapella Upgrade, RPL raced to a new 2023 peak of $61.
But declining interest from crypto investors and an industry-wide contraction in altcoin markets has seen Rocket Pool take on a bearish outlook in recent weeks.
Rocket Pool Network Traction is Dropping
On-chain data depicts that investors made a U-turn away from Rocket Pool around a week after the Shapella Upgrade. The chart below shows how RPL Network Growth began to decline around April 17. And it has not recovered since then.
Between April 17 and May 2, Rocket Pool recorded an 86% decline in network growth. The red line in the chart below illustrates how the network traction decreased from 316 to a lowly 45 new addresses created on May 2.
Rocket Pool (RPL) Price vs. Network Growth. May 2023. Source: Santiment
Network growth measures new participants joining a blockchain network by evaluating the number of new wallet addresses created daily.
A steep decline, as observed above, indicates that the Rocket Pool ecosystem could be losing traction and market share to alternative protocols. Hence, the native RPL token could struggle to find new demand to propel it from the current bearish downturn.
Active Users Are Turning Away
The recent downturn in the number of Daily Active Users (DAU) on the Rocket Pool network further confirms the bearish outlook. The chart below illustrates how the DAU has dropped from 799 on April 18 to 195 addresses at the close of May 1.
Rocket Pool (RPL) Daily Active Addresses. May 2023, Source: Santiment
DAU measures the daily number of unique wallet addresses interacting on a blockchain network. Notably, whenever there is a bearish convergence between price and DAU, it indicates that tough times are ahead for the underlying tokens.
As things stand, unless the Rocket Pool team can reignite the interest of investors and network participants, the RPL price outlook could remain bearish.
RPL Price Prediction: Will RPL Drop Below $40?
IntoTheBlock’s Global In/Out of the Money (GIOM) price data shows that RPL will likely fall below $40. But the bears will have to battle the initial support line around $43. Around that price level, 47 addresses that bought 2,900 tokens will look to prevent the drop. However, this is a small support cluster in a bearish market.
If the bears stay in control as expected, then the RPL price could slump toward $35, where there is more significant support from 483 addresses holding 15 million tokens.
Rocket Pool (RPL) GIOM Price Distribution Data. May 2023, Source: IntoTheBlock
Yet, the bulls could invalidate the bearish stance if RPL price can surge beyond $50. But fierce resistance from 218 addresses holding 38,000 addresses could mount a roadblock.
Though unlikely, if the bulls manage to scale the $50 resistance, holders can anticipate a full-blown rally toward the $60 zone again.
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