XRP Faces Renewed Selling Pressure as Investors Shift from Holding to Selling

XRP has dropped below critical price levels, sparking a wave of fear in the market as bullish support remains elusive. This article examines the increased selling pressure on XRP, highlighting shifts in investor behavior and the resulting impact on prices.

Key Takeaways

XRP has fallen below the pivotal $2 mark, causing increased fear and uncertainty among investors.
A significant drop of approximately 50% from XRP’s previous high near $3.66 has been observed.
Investors are increasingly selling, with significant inflows to exchanges such as Binance indicating a trend towards distribution rather than accumulation.
The current price is hovering around $1.87–$1.90, with critical support situated at the $1.80–$1.85 range.

XRP Faces Renewed Selling Pressure as Investors Shift from Holding to Selling

Renewed Selling Pressure on XRP

XRP is currently trading below key technical levels after falling beneath the $2 mark, which has shifted market sentiment towards fear. Bulls are facing challenges in securing reliable support, and recent efforts to stabilize the price have not attracted ongoing demand. The breach of this psychological and structural level has left XRP susceptible, as traders are adopting a more defensive stance amid the broader uncertainty in the altcoin market.

Analysis from Darkfost indicates a notable increase in selling pressure over recent weeks. The data reveals that the current price movement is not simply a minor pullback but rather a part of a more extensive corrective phase. XRP has declined around 50% from its peak near $3.66, now trading closer to the $1.85 region. This significant downturn signifies a clear change in market behavior, as earlier optimism has shifted towards risk reduction and capital preservation.

According to Darkfost, the uptick in selling is attributed to a mix of profit-taking by long-term holders and capitulation from newer investors who bought at higher levels. As prices fall further away from previous highs, market confidence has weakened, enhancing the downside pressure.

Exchange Inflows Indicate Increased Selling Pressure

Darkfost further illustrates that the recent uptick in selling pressure is evident when analyzing XRP inflows to exchanges, particularly Binance, which accounts for a large portion of XRP trading volume. Typically, rising inflows to exchanges signal that holders are preparing to sell, especially when such increases are sudden and sustained.

XRP Ledger Exchange Inflow | Source: CryptoQuant

Following a period of relative calm marked by steady inflows, the landscape changed sharply around December 15. Since that time, transfers of XRP to Binance have surged, with daily inflows ranging consistently from 35 million XRP to a peak of about 116 million XRP noted on December 19. This shift signals a departure from the holding patterns observed during much of October and November.

The altered inflow dynamics suggest a change in investor psychology. Long-term holders seem to be taking profits following XRP’s strong performance earlier in the cycle. In contrast, newer participants are increasingly capitulating and selling at a loss as prices continue to decline. This combination intensifies downward pressure and reinforces the current corrective trend.

As long as high inflows to exchanges persist, conditions for accumulation appear unfavorable. If deposits do not slow down significantly, XRP may struggle to establish a solid base, heightening the risk of an extended correction.

Analyzing XRP's Price Action: Testing Demand Levels

XRP remains under notable technical pressure, with its price lingering near the $1.87–$1.90 range following a prolonged downward trend on the daily chart. This price structure reflects a significant loss of bullish control after being rejected from the $3.00–$3.50 region earlier in the year. Since reaching that peak, XRP has continuously formed lower highs and lower lows, confirming a persistent bearish market structure.

XRP consolidates around critical level | Source: XRPUSDT chart on TradingView

From a trend analysis perspective, XRP's price is currently trading below all major moving averages. The short-term moving average has declined sharply and now serves as immediate resistance, while both medium- and long-term averages are also trending downward, reinforcing the bearish outlook. Each attempted rally has capped below these averages, indicating that sellers dominate market activities.

The $1.80–$1.85 area serves as critical support, having withstood several tests recently. However, the absence of a strong recovery signifies weak buying interest. A decisive break below this level would expose XRP to a more profound retracement toward the $1.50 region, where historical demand has previously emerged.

Unless XRP can regain and hold above the $2.10–$2.20 range, the path of least resistance appears to be downward, with risks favoring further consolidation or an extension of the correction.

Featured image from ChatGPT, chart from TradingView.com