Understanding the XRP Dip Buying Phenomenon
The cryptocurrency market, often characterized by volatility, has shown renewed interest in Ripple’s native token, XRP, with active dip buying visible among short-term investors. However, despite this buying activity, XRP prices continue to trend downward. To understand what’s happening, let’s break down the key factors.
Short-Term Investors Step Up
Recent data reveals that short-term holders have been steadily accumulating XRP. According to Hodl Waves, a metric that tracks holding duration, wallets holding XRP for 1–3 months have increased their holdings from 8.94% of the total supply on October 16 to 9.17% by mid-November. Similarly, the 1-week to 1-month cohort rose from 3.74% to 5.53% over the same period. This points to rising confidence among short-term traders who are likely eyeing immediate gains from potential bounces.
The Problem: Long-Term Holders Are Selling
While short-term trades may indicate optimism, the overwhelming selling pressure from long-term investors is offsetting any potential price recovery. On November 3, Ripple witnessed a massive 102.50 million XRP flowing out from long-term wallets. By November 14, this figure had ballooned to 181.50 million XRP, marking a staggering 77% surge in long-term sell pressure in less than two weeks.
This significant outflow showcases a lack of confidence among long-term holders, which is a key reason why XRP has struggled to maintain upward momentum.
Chart Insights: Key Levels to Watch
Technically, XRP’s price range is trapped between critical levels. Resistance at $2.26, closely tied to the 0.618 Fibonacci retracement, has proven hard to break. Moreover, the Chaikin Money Flow (CMF) indicator has fallen to –0.15, indicating significant net outflows. The descending trendline break in CMF suggests that larger investors are withdrawing funds, further weighing down the price.
If the decline continues, XRP risks sliding to $2.17, with further downside exposure at $2.06. A drop below this level would invalidate any short-term bullish outlook. To regain momentum, the token needs a clean daily close above $2.38, potentially unlocking a path toward bullish levels like $2.57.
How to Navigate the XRP Market
While XRP continues to exhibit weaknesses in its price movement, the token retains significant potential for trading opportunities in the short term. For traders and investors, staying informed about key levels and market sentiment is essential.
If you’re considering enhancing your investment research, tools like the TREZOR Crypto Wallet can be incredibly helpful. This secure wallet provides an easy way to store XRP and other cryptocurrencies while tracking your portfolio effectively.
Final Thoughts
Despite visible buying activity by short-term cohorts, XRP is struggling due to heavy selling pressure from long-term holders. Until the token decisively reclaims higher resistance levels, caution should remain the guiding principle for potential investors. Always remember that the crypto market is speculative, and decisions should be based on thorough research and risk tolerance.
