Whale Inflows Dampen XRP ETF Optimism As Selling Pressure Persists

Overview

Recent developments surrounding XRP exchange-traded funds (ETFs) have created a buzz in the market, with expectations that they could ignite institutional demand and positively impact XRP’s price. However, on-chain data from CryptoQuant indicates a contrasting narrative, revealing significant selling pressure from large holders, or “whales,” which has dampened any optimistic effects from ETF inflows.

Whale Exchange Inflows Expose Supply Pressure

On-chain analytics from CryptoQuant has highlighted a concerning trend among XRP whale addresses, particularly in their interactions with the cryptocurrency exchange Binance. The data shows that recent deposits of XRP to exchanges are predominantly from large holders, specifically in the ranges of 100,000 to 1 million XRP, and transactions exceeding 1 million XRP. This activity is indicative of large-scale movements rather than typical retail trading, suggesting that these whales are preparing to sell significant portions of their holdings.

The Binance Inflow-Value Band chart illustrates this trend, showing that inflows have been largely concentrated in these higher-value bands. In contrast, smaller transactions, those between 10,000 and 100,000 XRP, have been far less frequent. This disparity indicates a notable supply increase from whales that smaller buyers cannot absorb, contributing to the ongoing struggles of XRP’s price.

Lower Highs, Lower Lows Confirm Supply Overpowering Demand

The price action of XRP has mirrored the inflow data, consistently printing lower highs and lower lows following major deposits on exchanges. This pattern suggests that the number of new spot buyers on Binance is insufficient to counterbalance the selling pressure from whales. Consequently, XRP has faced resistance every time it approaches the $1.95 mark, with the first significant support zone identified between $1.82 and $1.87. Should the trend of large inflows continue, the price might decline further, potentially reaching the range of $1.50 to $1.66.

The overall interpretation of these dynamics indicates that, despite the excitement surrounding ETF approvals, there has not been a sustained increase in spot demand for XRP. Instead, whales who accumulated XRP in anticipation of ETF approval seem to have seized the opportunity to offload their holdings. However, it’s worth noting that inflows into Spot XRP ETFs may have provided some support, as recent data suggests these funds saw a notable influx of capital.

From author

The current landscape for XRP highlights a disconnect between market expectations and actual trading behavior. The enthusiasm surrounding potential ETF approvals has not translated into the expected price movement, primarily due to the actions of large holders. As the market continues to navigate these dynamics, it remains crucial for smaller investors and traders to be aware of the underlying trends influencing price action.

Impact on the crypto market

• Large whale inflows are contributing to increased selling pressure, overshadowing positive news regarding ETF inflows.
• The price of XRP is exhibiting a pattern of lower highs and lower lows, indicating a bearish trend.
• The disparity in transaction sizes suggests a significant imbalance between supply from whales and demand from smaller buyers.
• The overall lack of sustained spot demand for XRP raises questions about the effectiveness of ETF-related optimism in influencing price.
• Continuous large inflows could lead to further declines in XRP’s price, impacting market sentiment and investor confidence.