On-Chain Analysis Suggests XRP Price Could Drop Further — Here’s Why

In the first two months of the year, XRP's performance was disappointing, but its price has recently stabilized, giving some hope to investors. However, recent on-chain analysis indicates that the cryptocurrency may not have reached its true local price bottom yet.

Key Takeaways

On-chain data suggests XRP may not have hit its price bottom.
Analysts observe low days spent in profit for current holders.
Recent growth in XRP Ledger driven by small and mid-sized wallets.
Large holders show minimal growth, indicating potential bearish movement.

XRP Price

Days of Profit Remain Low — Analyst Insights

In a recent update on the platform X, on-chain analyst Joao Wedson provided a perspective on the XRP market, asserting that the digital asset has not yet entered the early stages of a price recovery, which counters the beliefs of many investors. His analysis relies on the "Number of Days Spent At A Profit" metric.

This metric measures how long current XRP holders have been experiencing profits compared to previous price levels. Essentially, it reflects the number of days since XRP last traded at a higher price.

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Wedson remarked that historically, this metric achieves extreme levels during periods where the number of days in profit reaches high points. However, in the case of XRP, the price continues to trade well below these significant historical levels.

XRP Price

This context suggests that the XRP price may face additional downward movement in the near to mid-term. The analyst emphasized that this situation is essential for the development of historical patterns, which typically precede the formation of price lows.

XRP Ledger Shows Growth Across Various Wallet Sizes

In parallel, blockchain analytics firm Santiment has reported notable growth within the XRP Ledger. A significant aspect of this growth stems from an increase in the number of small wallets holding XRP.

Particularly, there has been a surge from what are termed 'shrimp' investors (wallets with less than 100 XRP). Santiment noted that these small wallets have collectively reached about 5.66 million addresses, indicating a broader adoption of XRP among everyday users.

Additionally, there has been a rise in wallets holding between 100 and 100,000 XRP, now totaling approximately 2.01 million. This segment includes mid-tier investors who could indicate a more serious influx into the XRP market.

Despite the growth in small wallets, large-holder wallets have shown only marginal increases. Santiment indicated that wallets containing over 100,000 XRP have reached roughly 32,054. It appears that this group is primarily involved in distribution or repositioning, rather than accumulating.

With whales having minimal impact on driving XRP prices, it raises the likelihood that a local bottom may still be lower than current prices. As of the latest updates, XRP trades at around $1.44, reflecting a slight decline of 0.4% in the past day.

XRP Price The price of XRP on the daily timeframe | Source: XRPUSDT chart on TradingView