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XRP’s recent downturn to $1.41 raises questions as holders cash out on substantial profits, reflecting a shift in market sentiment.
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With 97% of XRP’s supply currently yielding profits, the trend indicates significant sell-off pressure from both short and long-term holders.
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According to industry analysts, failure to maintain support at $1.33 could lead to further declines toward $1.28, jeopardizing bullish momentum.
XRP faces downward pressure after hitting multi-year highs, with profit-taking driving prices to $1.41. Key support levels are at risk amid market shifts.
XRP Experiences Significant Profit-Taking Activity
The recent surge in selling activity for XRP, which peaked at $1.63, has raised critical concerns about the sustainability of its gains. Over the past week, as XRP’s price fell to $1.41, realized profits among holders reached an astonishing $1.84 billion, marking the highest profit-taking since April 2021. This trend is evident in the on-chain data provided by Santiment, which tracks the financial activities of XRP holders.
XRP Realized Profit. Source: Santiment
This metric of realized profit illustrates how much profit the XRP network has actually capitalized on over a given period, reflecting the capital gains holders are enjoying. This recent peak in profit-taking behavior further hints at changing sentiments towards XRP as the market reacts to profit realization.
Long-term Holders Contribute to Bearish Sentiment
Long-term holders have significantly impacted the price dynamics of XRP. With the Mean Dollar Invested Age (MDIA) declining sharply, it suggests that these holders have started to take profits after the token’s recent highs. The MDIA metric indicates the age of coins in circulation, and a fall in this figure typically points to increased selling, which in XRP’s case, correlates with a period of heightened selling pressure.
XRP Mean Dollar Invested Age. Source: Santiment
Assessing XRP’s Immediate Price Outlook
Current market dynamics place XRP at a precarious position. Maintaining the support level around $1.33 is critical. Should the price fail to hold at this level, analysts predict a significant decline approaching $1.28. This bearish trend could negatively impact market sentiment and further discourage potential buyers from entering the market.
XRP Price Analysis. Source: TradingView
On the flip side, if buying interest resumes, it could potentially validate the notion of recovering back to the previous high of $1.63, bringing back a bullish outlook for XRP.
Conclusion
The significant profit-taking among XRP holders underscores a critical moment in the asset’s market journey. With a fragile support position at $1.33, the next few days will be crucial in determining whether XRP can stabilize or if it will succumb to further losses. The current situation calls for vigilant monitoring of market trends and sentiment to anticipate future movements efficiently. Investors should remain cautious and consider both bullish and bearish scenarios in their trading strategies.
