XRP Faces Decline as Sellers Continue to Dominate — Watch for $1.50 Support Level

Summary: Ripple's XRP has recently experienced a significant downturn, influenced by ongoing selling pressure in the derivatives market and notable insider sales. Despite some accumulation from spot investors, bearish trends are prevalent, suggesting more declines may lie ahead, with $1.50 emerging as a crucial support point.

Key Takeaways

XRP has seen a nearly 50% drop from its yearly high, currently trading around $1.89.
Selling pressure in the derivatives market has weakened buyer interest, particularly on Binance.
Chris Larsen's distribution of XRP holdings has contributed to negative sentiment.
While spot investors have been accumulating XRP, overall momentum remains bearish, indicating a potential for further declines toward the $1.50 support level.

XRP stays bearish as derivatives volume collapses and Larsen’s sales weigh

XRP Declining Amid Persistent Selling Pressure

In recent weeks, Ripple has faced increasing pressure, turning a bullish start to the year into a downward trend. XRP, which initially showed a strong correlation with Bitcoin, has dropped almost 50% from its peak and is currently trading near $1.89, indicating a growing bearish momentum.

Driving Forces Behind the Bearish Market

The recent decline in XRP's price has been predominantly influenced by sustained selling activity within the derivatives market. This trend is highlighted by decreasing trading volumes and shifts in trader sentiment.

The situation is especially apparent on Binance, one of the largest exchanges, where changes in market behavior can be closely observed. According to CryptoQuant data, Taker Buy Volume on Binance has plummeted by approximately 95.7% in the past month, falling from about $5.8 billion to nearly $252 million.

Taker Buy Volume

This dramatic drop aligns with a consistent downtrend in XRP's price, indicating diminished buying interest during the current sell-off. Analyst Darkfrost from CryptoQuant attributes this downturn to the liquidation event on October 10, along with a capital shift from altcoins to Bitcoin.

Additionally, the positioning in the derivatives market still leans heavily towards selling, with the Taker Buy/Sell Ratio resting at around 0.883, meaning that sell transactions continue to outnumber buy orders.

Insider Selling Impacts Market Sentiment

Chris Larsen, Ripple's Co-Founder, has also played a role in the recent downturn of XRP. A report by analyst Ja Martun revealed that Larsen reallocated a substantial amount of his XRP holdings just as the asset was nearing a local high.

This sell-off spanned ten days and involved the offloading of over 200 million XRP, which further applied downward pressure on the price.

Chris Larsen XRP Address Balance.

As Martun noted, “Still buying? You’re the exit liquidity. He’s dumping on you.” Despite this insider selling, spot investors have continued to purchase XRP, with recent market activity showing an addition of around $11 million worth of XRP.

Since the week of September 8, reports indicated a series of weekly net inflows, leading to a total accumulation of $2.51 billion during this period. This trend suggests that spot buyers still have a bullish outlook; however, selling pressures from derivatives and insider transactions are currently overshadowing this optimism.

Weakening Accumulation Trends

To assess the strength of the ongoing accumulation, AMBCrypto examined XRP's Accumulation/Distribution indicator. As of now, this indicator remains in negative territory, indicating that selling still exceeds buying pressure.

XRP accumulation distribution indicator

The A/D line shows a net reading of approximately -2.5 billion XRP and is continuing to trend downward. If this trend continues, XRP may experience additional downward pressure, and traders should watch for the $1.50 mark as a significant support level.

Conclusion

XRP's current state reflects the ongoing struggles within the cryptocurrency market, particularly regarding selling pressures and insider activities. While some investors remain optimistic about accumulating the asset, overall trends indicate that XRP could face further declines unless buying activity intensifies. The $1.50 support level becomes crucial to monitor in the coming weeks.