XRP Struggles to Keep Pace in Crypto Market – A September Analysis

• XRP’s price experienced a slump in early September, coinciding with a surge in the US dollar index, causing it to lag behind the overall crypto market.
• Large-scale XRP transfers by ‘whales’ could potentially impact the market, as the distribution of XRP supply in wallets is shifting.
• Technical analysis indicates that XRP is trading within a bear flag formation, suggesting a risk of price drop to $0.40, but closings towards $0.54 could signal an uptick.

Market Impact: Neutral

Unpacking XRP’s Underperformance in the Crypto Market

Recently, XRP seems to have been overshadowed by the volatility in the crypto market. This underperforming asset experienced a notable decline, particularly in early September. One of the reasons behind this is believed to be the movement of assets by large-scale investors, often referred to as ‘whales’. In this article, we will delve into the current state of XRP and potential scenarios for September.

On September 5, XRP’s price fell by approximately 1.5% to $0.50, underperforming the broader crypto market which fell by about 1% during the same period. This decline coincided with a rise in the US dollar index (DXY). The correlation between the dollar and cryptocurrencies has been consistently negative since July.

XRP’s decline appears to be part of a horizontal consolidation trend. Investors are buying XRP as soon as the price increases, keeping its price within a narrow trading range of $0.49-$0.51. One of the possible reasons behind the increasing XRP selling pressure is likely large whale transfers.

Whale Movements and XRP Supply Distribution

For instance, on September 3, an anonymous address sent approximately 29.7 million XRP tokens, worth about $15 million, to the BitStamp exchange. While this amount is not large enough to influence XRP market trends, according to data tracked by CoinCarp, the sender is a whale, ranking among the top 98 wealthiest XRP owners.

Looking at the supply of XRP among whale addresses, a distribution shift among investors is observed. For example, the supply of XRP held by entities with a balance of 1 million to 10 million tokens has been decreasing since September 3. Similarly, the supply of XRP held by whales with a balance of 100 million to 1 billion tokens also fell during the same period. Interestingly, wallets with a balance of 10 million-100 million XRP have taken over the supply from wallets with a balance of 100 million-1 billion.

XRP Price Analysis for September

From a technical standpoint, XRP appears to be entering the breakout stage of a bear flag formation. A bear flag is a bearish formation characterized by price consolidation within a range defined by a falling trend line resistance and a rising trend line support. The flag target is seen after the price falls below the lower trend line and drops by the height of the previous decline.

As a result of this technical analysis rule, XRP’s price carries a risk of falling to $0.40 in September 2023, approximately 20% lower than current price levels. Conversely, a closing above XRP’s 200-day exponential moving average (200-day EMA; blue wave) around $0.52 could invalidate or delay the bear flag breakout. Instead, the price could be preparing to rise towards the flag’s upper trend line near $0.54 or the 50-day EMA (red wave) around $0.56. This bullish scenario could result in a price increase of 7-15% from current levels in September.