XRP Trading Below $2 Following $721 Million Profit-Taking

XRP's market dynamics have shifted as a whale wallet aged between five to seven years realizes substantial profits. This movement has resulted in XRP trading below the crucial $2 mark, raising questions about market strength and future price support.

Key Takeaways

A well-established XRP wallet made a profit of over $721 million on December 11.
The decline below the $2 key level indicates market vulnerability.
The current cryptocurrency environment is tense, with thin liquidity and high sensitivity to market shocks.
XRP's price is now at $1.89, making upcoming trading sessions especially critical.

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The Profit-Taking Trigger

In the world of cryptocurrency, one of the clear indications of market behavior is when older holdings decide to sell. This isn't about minor profits but instead involves long-held assets. Recently, researcher CryptoVizArt from Glassnode pointed out a concerning trend: on December 11, an XRP wallet that had been holding since around five to seven years ago (with an initial cost of approximately $0.40) realized a staggering profit of more than $721.5 million.

While a single wallet's activity typically does not "break" the market, the timing of this event is crucial. Instead of profit-taking during a price surge, it occurred as XRP exhibited weakness, falling near the pivotal $2.0 level. CryptoVizArt noted this event on X, stating, “On December 11th, a 5-7 year old XRP wallet address (with a cost basis of $0.4) realized over $721.5M in profit! A rare sizable profit-taking while the price shows weakness right at the $2.0 key level.”

XRP Realized Profit by Age

Implications for XRP's Price Movement

The $2 mark carries significance for various reasons — it is a round number, a psychological threshold, and an obvious area of interest on charts. Recently, the market has been precariously treating this level, continuously testing support between $2 and $1.90 from early December. Bullish traders have managed to keep the weekly closes above this critical range.

The $721 million profit-taking act serves as a wake-up call that there is a significant amount of supply in the market. While one might interpret the old wallet cashing out as a form of "de-risking," it also signals that the market must absorb this distribution when prices are already soft. If buying interest is strong, the situation seems manageable; however, if demand is weak, the $2 level may become a liabilities trap.

Currently, a general air of "thin" liquidity pervades the broader crypto market, not just XRP.

CryptoVizArt provided further context as of December 13, suggesting that Bitcoin's current consolidation around the $80,000 to $90,000 range is generating stress levels akin to those seen in late January 2022. He highlighted on X, “The current $80K–$90K consolidation range is generating a magnitude of stress comparable to late January 2022, with Relative Unrealized Loss approaching ~10% of market cap. This places the market in a regime where liquidity is constrained, and sensitivity to macro shocks is elevated, yet still below the levels typically associated with full bear-market capitulation.”

Market Dynamics and Future Considerations

This broader market context matters significantly, as altcoins do not operate in isolation. During turbulent times in the overall market, major sell-offs at key levels can carry more weight. This doesn’t necessarily mean all XRP holders are suddenly in a panic; rather, it reflects how traders and market-makers often pull back risk collectively. As spreads widen and market depth reduces, individual large trades can disproportionately influence prices.

However, there is a silver lining. A significant profit-taking event can also indicate a market clearing out old supply, allowing new demand to enter — a transition that could eventually lead to a stronger foundation for price support. The critical question now is whether XRP will hold above the $2 mark as this transition occurs.

At the time of writing, XRP is trading at $1.89, making the upcoming week's close an incredibly pivotal event for the cryptocurrency.

XRP price