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Ripple (XRP) faces significant selling pressure as critical support levels are tested, raising questions about the future of its market structure.
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As the market navigates uncertainty influenced by macroeconomic factors, XRP’s vulnerability to price fluctuations has intensified.
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“If whales don’t step in again soon, XRP’s $2 support could be in trouble,” notes a recent analysis from COINOTAG.
As Ripple (XRP) struggles to maintain its price amid elevated selling pressures, market analysts caution investors about potential support breaks.
XRP Faces Crucial Market Decisions Amid Selling Pressures
Ripple’s XRP has encountered a notable wave of selling, with over 1.12 billion tokens sold in just 48 hours, bringing it dangerously close to the $1.95 — $2 support zone. This price level has been historically significant, as it has served as a critical accumulation area for buyers following previous downturns.
However, current market conditions are less favorable compared to previous recoveries. Market participants are keenly observing if this support will hold, as it has already been tested multiple times since earlier peaks, including a rally that saw XRP reach $2.80.
This time, an essential factor is market momentum, particularly from Bitcoin (BTC). The leading cryptocurrency has fallen beneath the $80k mark, affecting investor sentiment towards XRP. Historical patterns reflect that XRP has closely tracked Bitcoin’s price movements; thus, any decline in Bitcoin could lead to increased pressure on XRP.
Whale Dynamics and Market Sentiment Influence XRP’s Stability
Historically, whale dynamics have played a significant role in stabilizing XRP’s price. Notably, a cohort of whales holding between 100M–1B XRP contributed significantly to past recoveries, injecting $4 billion during the late-February dip and facilitating a rebound to $2.50.
Yet, the current situation appears concerning. In a rapid two-day span, these whales sold off more than 2 billion XRP, raising alarms regarding the potential breakdown of the critical $2 support. If the significant whale activities shift towards selling rather than accumulation, the outlook for XRP could deteriorate further.
Source: Santiment
Increasing Short-Selling Activity Signals Market Uncertainty
With market volatility on the rise, investors are embracing de-risking strategies. The Estimated Leverage Ratio (ELR) is nearing its March low, indicating a decrease in high-risk trading as sell orders amplify. The dynamics in the futures market suggest a bleak outlook for XRP.
One significant observation is the substantial outflow from exchange platforms. XRP has seen 86 million tokens exit Binance, exceeding the 77 million tokens seen in sell orders on the spot market. Despite this, the cumulative pressure from futures trading and large holders may outweigh these shifts.
Moreover, the recent trend of increasing short-selling adds another layer of concern. With Funding Rates (FR) turning negative for the first time this month, the sentiment tilts more heavily towards shorts in perpetual contracts. If this trend persists without a dramatic turnaround in buyer sentiment, the risk of a long squeeze could become a reality, potentially pushing XRP’s price below the critical $1.95 threshold.
Source: CryptoQuant
Conclusion
As Ripple’s XRP grapples with substantial selling pressure and market uncertainty, the importance of the $2 support level cannot be overstated. Without significant intervention from larger holders or a resurgence in market confidence, XRP may struggle to retain its upward momentum. Investors should proceed cautiously as the landscape continues to shift, with both macroeconomic factors and internal dynamics influencing price action.
