XRP, the cryptocurrency associated with Ripple, has been grappling with significant price volatility, experiencing a sharp decline since its mid-July peak. While the digital asset has already shed over 20% of its value, crypto analyst Ali Martinez suggests that the current weakness may persist, driven by crucial on-chain metrics and selling pressure from large holders.
Persistent Downward Pressure and Whale Activity
The recent downturn in XRP's price is largely attributed to substantial selling by major investors, often referred to as "whales." Over the past three weeks, wallets holding between 1 million and 1 billion XRP tokens significantly reduced their holdings, offloading approximately $6 billion worth of XRP. This intense distribution has been a primary driver of the altcoin's 20% drop from its $3.6 high in mid-July. Further compounding the bearish sentiment, a "MVRV death cross" — a signal previously associated with sharp declines — has also been observed. Historically, such a signal in late March led to a 30% price drop for XRP, raising concerns about a potential repeat performance.
Critical Support Levels and Potential for Further Decline
As XRP navigates this correction, key support levels are under close scrutiny. While $2.8 serves as immediate support, Ali Martinez points to $2.48 as a more significant on-chain floor. This level is particularly crucial as it represents the average buying price for a large segment of current holders. A breach below $2.8 could see XRP testing $2.48, aligning with the 200-day Simple Moving Average on price charts. Should broader market sentiment remain subdued, this confluence of technical and on-chain data suggests XRP could fall an additional 15% from its current value, opening up what some might consider a more attractive buying window.
Mixed Signals: Is a Bottom Forming?
Despite the prevailing bearish outlook, there are indications that some savvy traders are beginning to accumulate XRP, anticipating a price reversal. Data from CoinGlass reveals that smart Binance traders have recently increased their long positions, rising from 64% to 69% over two days. This shift follows an earlier period of significant trimming of long positions, suggesting that a segment of large players believes XRP's bottom might be in. While Bitcoin's broader market performance remains uncertain, these diverging signals highlight the ongoing debate among investors about XRP's immediate future trajectory and whether the current dip presents a strategic entry point.
