2023-08-01 20:14:07
On August 1, Ripple’s XRP price briefly dipped below $0.68 for the first time since the infamous SEC stunt in mid-July. Analysis of the chain’s data reveals that long-term holders have started to sell.
Following its high profile victory against the SEC, the price of Ripple (XRP) hit a one-year high of $0.84. However, for the past two weeks, the price of the token has been stagnating around the $0.70 level. On-chain data reveals that long-term investors are increasingly unconvinced of future gains.
Do the bulls have enough reserves to absorb the downside pressure?
Long-term investors seek to shed their XRP
This week, XRP has witnessed intense selling pressure from older holders. According to data from Santiment, the sell-off started around Monday July 28th.
As proof, the age of XRP consumed increased from 8.89 billion on July 22 to 94.71 billion on July 28. This quickly triggered a 3% correction, dragging the token below $0.70.
More worryingly, the graph below shows that XRP consumed jumped to 231 billion and 437 billion on July 31 and August 1 respectively.
Ripple | Age Consumed, August 2023. Source: Saintly
Consumed age assesses real-time changes in the trading activity of long-term investors. It is calculated by multiplying the number of recently traded tokens by the number of days since their last movement.
Thus, this graph reveals that long-term holders are abandoning their XRP tokens. So they have been moving tokens over the past few days.
If there is not enough demand in the market to compensate, this could potentially trigger a price retracement of XRP.
Volume down since SEC win
On the other hand, the XRP Ledger blockchain was unable to maintain the high transactional activity experienced following the victory of the SEC lawsuit. This confirms the bearish outlook as long-term holders begin to exit their positions.
In the aftermath of the lawsuit victory, the red bars in the chart below show that investors transferred 2.77 billion XRP coins on July 13. Since then, network activity has tended to decline. At the monthly close of July 31, the volume reached only 1.21 billion XRP.
Ripple – Transaction volumes, August 2023. Source: Saintly
The trading volume estimates that the current market demand is therefore down for the token. This decline in transactions is also spreading to price changes.
Indeed, since the increase in selling pressure causes long-term holders to exit their positions. If XRP cannot support sufficient demand, then current prices may not be supported.
XRP Price Prediction: $0.65 Support Is Critical
If long-term XRP holders continue to liquidate their positions at the same rate, it could extend the token’s slide to $0.60. However, the coin will enjoy initial support around $0.65.
MVRV (30d) data shows that most investors who bought XRP in the last 30 days are now 1% underwater. They could keep selling until their losses reach 5%. This would happen around the $0.65 range.
But if this support level does not hold, XRP could fall closer to $0.60.
Ripple, August 2023. Source: Saintly
However, the bulls could still regain control. This, on the condition that Ripple’s asset crosses the $0.75 mark again. However, this is quite unlikely given the current levels of trading activity. Therefore, investors might start selling once their profits reach 5%, or around $0.72.
But if this resistance level does not hold, XRP could regain $0.75.
Moral of the story: the horizon is darkening again for XRP.
Disclaimer
Disclaimer: In accordance with The Trust Project guidelines, this price analysis article is intended for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to providing accurate and unbiased information, but market conditions may change without notice. Always do your own research and consult a professional before making any financial decisions.
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