Whale Activity and Short Liquidations Could Signal Potential Breakout for XRP Amid Weakening Network Engagement

XRP is witnessing increased whale activity and short liquidations, but underlying network engagement is showing signs of weakness.

• Whale transfers and short liquidations hint at rising bullish pressure.

• On-chain metrics diverge as user activity weakens despite price recovery.

Ripple recently moved 300 million XRP to an unknown wallet, followed by another 70 million tokens transferred between unidentified addresses.

These whale-scale movements, totaling $782 million, have triggered renewed attention across the market.

At the time of writing, XRP was trading at $2.20, marking a 2.98% increase in the past 24 hours.

Such massive transfers often precede heightened volatility or strategic accumulation, making it critical to monitor follow-through from both retail and institutional investors in the coming sessions.

Are XRP investors quietly positioning?

On-chain exchange flow data at press time showed $122.62 million in inflows against $116.44 million in outflows, producing a modest net positive balance.

This slight accumulation suggests cautious optimism among market participants.

While not overwhelmingly bullish, the consistency of inflows amidst price gains signals that buyers may be positioning ahead of a potential breakout.

XRP’s Network Value to Transaction (NVT) ratio dropped 57.13% in the last 24 hours, reaching 118.24.

A falling NVT ratio implies that transaction volume is growing faster than market cap, signaling improved utility and a healthier network.

This drop aligns with increased capital rotation within the ecosystem, suggesting that XRP is becoming more fundamentally supported.

Outpacing fundamentals or setting up for a rebound?

Despite price appreciation, XRP’s daily active addresses fell to 17.2K, while transaction count dropped to 302K. This decline in user engagement raises concerns about the sustainability of current price levels.

Typically, rising prices supported by decreasing activity may indicate speculative momentum rather than organic growth.

Unless network participation rebounds, XRP may struggle to maintain its upward trajectory over the mid-term horizon.

The MVRV Long/Short Difference for XRP sat at -24.72% at press time, indicating that long-term holders were deep in unrealized losses.

Historically, such levels have aligned with bottoming phases where accumulation tends to increase. Consequently, the current metric points to a market that is undervalued from a holder perspective.

Bullish pressure is mounting

Short sellers faced liquidations worth $1.48 million, significantly outpacing the $364K in long liquidations on the 8th of May.

This imbalance indicates that bears were caught off guard during XRP’s price surge, creating a mini short squeeze.

The liquidation imbalance reinforces bullish momentum, as forced buybacks from liquidated shorts add to upward price pressure.

This development, if repeated, could accelerate XRP’s climb toward the next resistance zone.

XRP was trading just beneath the upper boundary of a descending channel, near $2.18, with key resistance at $2.40 at the time of writing.

A successful breakout above this level could propel the price toward the $3.00 mark, signaling a full reversal of the multi-month downtrend.

However, strong support remained at $2.06, giving bulls room to defend the trend if momentum stalls. Therefore, XRP appeared poised for a decisive move in the near term.

Can XRP break through?

The convergence of whale activity, short liquidations, and improved valuation metrics suggested that XRP was approaching a critical inflection point.

While weakening network activity may limit near-term upside, a breakout above $2.40 could unleash renewed bullish momentum.

The coming days will determine whether this setup translates into a sustained rally—or a failed breakout.