Here’s Why The XRP Price Keeps Crashing

Overview

The XRP price has recently experienced a significant decline, dropping below the psychological threshold of $2. On-chain analytics platform CryptoQuant has provided insights into the ongoing selling pressure that is affecting XRP, highlighting the role of large holders, or whales, in this trend.

Selling Pressure from Whales

According to a report by CryptoQuant, the XRP price is currently facing substantial selling pressure primarily from whales—entities holding between a substantial amount of XRP. These whales are responsible for the majority of inflows into the crypto exchange Binance. The report indicates that these significant holders are often looking to offload their coins, which contributes to the downward pressure on the XRP price.

CryptoQuant analyst PelinayPA noted that each time there is a major inflow spike observed on the chart, the XRP price tends to form a lower high and lower low structure. This pattern suggests that the supply of XRP is currently overwhelming demand, leading to a persistent decline in price. The report emphasizes that there is no strong new spot buyer in the market, which exacerbates the situation. The increase in available supply continues to push the price lower, despite the fact that whales are not aggressively dumping their holdings.

Price Levels and Market Dynamics

In the context of the ongoing price decline, PelinayPA highlighted important support levels to monitor. The report identifies a support zone between $1.82 and $1.87, where the price had previously stabilized and smaller buyers had emerged. However, should large outflows persist, there is a risk that XRP could fall to the range of $1.50 to $1.66. The current market conditions do not indicate a potential rally for XRP in the near term due to the prevailing selling pressure.

ETF Approval and Market Reaction

Despite the anticipation surrounding the XRP ETF approval, which was expected to generate institutional demand and drive prices higher, the reality has been different. The CryptoQuant report indicates that instead of creating upward momentum, the ETF narrative has led to increased high-volume inflows to Binance. Whales reportedly capitalized on the ETF approval expectations by transferring accumulated XRP to exchanges and utilizing it as sell-side liquidity. This strategy has effectively allowed whales to sell the ETF approval story to retail investors, further intensifying the selling pressure every time XRP approaches the $1.95 level.

From Author

The dynamics surrounding XRP’s price movements reveal the complexities of market behavior, particularly the influence of large holders. The interaction between whale activity and retail investor sentiment plays a crucial role in price fluctuations, and the current trends suggest a challenging environment for XRP in the immediate future. Understanding these factors is essential for navigating the volatile landscape of cryptocurrency investments.

Impact on the Crypto Market

• The selling pressure from whales is a significant factor influencing the XRP price, highlighting the impact of large holders on market dynamics.
• The expectation of ETF approval has not led to the anticipated price increase, indicating a disconnect between market sentiment and actual trading behavior.
• The presence of high-volume inflows into exchanges suggests that market participants are responding to whale strategies rather than fundamental demand.
• The identified support levels may provide temporary stability, but the overall outlook remains bearish given the prevailing selling pressure.
• The market’s reaction to institutional developments, such as ETF approvals, can vary significantly from expectations, impacting investor confidence.