XRP recently reached a new all-time high, but now seems to be in a phase of stabilization. While the cryptocurrency has struggled to break through significant resistance levels, it has also managed to avoid major downturns.
That said, this balance might not hold for too long, as there’s a noticeable shift in investor sentiment.
XRP investors aren’t confident
A substantial number of investors have begun selling off XRP, indicating a potential loss of confidence. In the past week, exchanges have seen nearly 450 million XRP flow in, valued at over $2.81 billion. This surge in supply illustrates that many holders are opting to sell their holdings, which often signals a bearish trend in the market.
It seems that rapid profit-taking is driven by the fear that XRP has hit its peak for now. As investors secure their profits, pressure intensifies on XRP prices. Continued selling might result in decreased levels of immediate support, complicating any chance of a rebound.
On-chain metrics further bolster these bearish sentiments. Liveliness—a measure tracking long-term holders—has recently reached a three-month high, suggesting that these holders, usually confident and influential, are currently parting with their XRP.
This shift in behavior could indicate looming downward pressure.
Historically, increases in liveliness often foreshadow market corrections. Given that long-term holders control a significant share of XRP, their choices can heavily influence price movements. The rise in liveliness mirrors a broader shift in market sentiment, aligning with the influx of supply to exchanges and a general decline in bullish outlooks.
Can XRP prices form another ATH?
XRP is presently trading at $3.48, which is about 4.8% below its peak. Despite being close to its record, the Altcoin has shown signs of weakness, sticking around a support level of $3.38. If this situation doesn’t change, that support might not hold for much longer.
If selling pressure persists, XRP could dip to $3.38 and test a crucial support at $3.00. A drop to this level would negate recent profits and confirm a bearish reversal in the short term. Losing $3.00 might lead to a prolonged phase of stabilization or a deeper correction.
Conversely, XRP could bounce back quickly if market participants absorb the sold supply and demand picks up again. In such a scenario, the Altcoin could break through $3.66, push past $3.80, and aim for $4.00. Such a movement could counteract the bearish perspective and lead to the formation of a new all-time high.
