Ripple’s XRP has been on a rollercoaster ride in recent weeks, with sellers taking control and driving its price closer to the critical $1.50 level. Despite early-year bullish momentum and a strong correlation with Bitcoin, XRP’s price has dropped by nearly 50% from its yearly high, now hovering near $1.89 at the time of writing.
Why Is XRP Dropping?
The ongoing decline in XRP’s price can be attributed to continued selling pressure in the derivatives market. Crypto trading trends reveal a dramatic reduction in buyer aggression, as highlighted by data from Binance, the world’s largest cryptocurrency exchange.
CryptoQuant data shows that Taker Buy Volume on Binance tumbled by an alarming 95.7%, plummeting from $5.8 billion to just $252 million over the past month. This marked a significant shift in trader psychology, with sell-side momentum firmly in control. Meanwhile, the Taker Buy/Sell Ratio at 0.883 indicates that sell-side trades far outweigh buy-side activity, further pressuring XRP’s value.
Insider Activity and Its Impact
XRP’s price troubles have also been exacerbated by insider actions, particularly by Ripple co-founder Chris Larsen. Larsen reportedly sold a significant amount of XRP when it hit its local high, offloading over 200 million XRP during a 10-day span. This move added fuel to the ongoing bearish momentum and reinforced sell-offs in critical market sessions.
Is There Any Positive Buying Activity?
Interestingly, Spot investors continue to accumulate XRP despite the downward price trajectory. Over $11 million worth of XRP was purchased recently, with data showing weekly Net Inflows totaling $2.51 billion since early September. This consistent buying behavior suggests a bullish sentiment in the Spot market, though it has done little to offset the sell-offs in derivatives.
However, XRP’s Accumulation/Distribution (A/D) indicator paints a grim picture. The indicator continues to trend in negative territory, meaning selling pressure outweighs buying. With the A/D line tracking a reading of -2.5 billion XRP and trending lower, $1.50 could emerge as a critical support level should the bearish momentum persist.
What XRP Investors Should Keep in Mind
The cryptocurrency market is inherently volatile, and XRP’s current position reflects a tug-of-war between bullish spot investors and bearish derivatives traders. While accumulation signals optimism, the sell-side remains dominant, at least for the short term.
If you’re considering entering the XRP market, it’s essential to stay updated with technical indicators and market trends. Tools like the Ledger Nano X hardware wallet provide a secure way to store your cryptocurrency holdings, especially during periods of price volatility. You can find this product here.
In conclusion, XRP faces near-term challenges, with $1.50 acting as a crucial level to watch. Whether this marks a turning point or a prolonged downtrend remains to be seen, but staying informed and cautious is critical for all XRP traders and investors.
