XRP Selling Pressure Returns: Investors Shift From Holding to Distribution

Overview

XRP has recently experienced a significant decline in its market value, notably falling below the $2 mark. This shift in price has led to a heightened sense of fear among investors, as the asset struggles to find reliable support in a challenging market environment.

Current Market Situation

XRP’s recent price action has been characterized by a notable breakdown that has shifted market sentiment from optimism to fear. After losing the critical $2 threshold, bulls have faced mounting difficulties in stabilizing the asset as attempts to attract sustained demand have failed. The psychological and structural implications of this decline have left XRP vulnerable, prompting traders to adopt a more defensive posture amid broader uncertainty in the altcoin market.

According to analysis shared by Darkfost, the selling pressure on XRP has intensified significantly in recent weeks. This current price movement is not simply a minor pullback; it is indicative of a deeper corrective phase. Data indicates that XRP has decreased by approximately 50% from its cycle peak, which was near $3.66, and is now trending toward the $1.85 region. This decline demonstrates a clear shift in market behavior, as earlier optimism has transitioned into risk reduction and capital preservation.

Darkfost’s assessment highlights that the increase in selling activity is largely driven by two factors: profit-taking from older positions and capitulation from more recent buyers who entered the market at higher price levels. As XRP’s price moves further away from previous highs, confidence among investors has deteriorated, reinforcing the downward momentum.

Exchange Inflows and Selling Pressure

The rising sell-side pressure in the market becomes particularly evident when examining XRP inflows to exchanges, with Binance emerging as a key player. As the exchange with the largest share of XRP trading volume, Binance often serves as an early indicator of market sentiment shifts. A surge in inflows to exchanges is typically seen as a signal that holders are preparing to sell, especially when this increase is both sudden and sustained.

After a period of stable and moderate inflows, a significant change occurred around December 15. Since that date, XRP transfers to Binance have increased, with daily inflows ranging between 35 million XRP and a notable spike of approximately 116 million XRP observed on December 19. This marks a clear departure from the holding-oriented behavior that characterized much of the preceding months.

The change in inflow dynamics suggests a shift in investor psychology. Long-term holders appear to be taking profits following XRP’s strong performance earlier in the cycle, while more recent entrants are increasingly capitulating and selling at a loss as the price continues to fall. This combination of factors amplifies the downside pressure and reinforces the current corrective trend.

From Author

The current state of XRP exemplifies the volatility and unpredictability of the cryptocurrency market. The significant decline in price, coupled with increased selling pressure, indicates a broader trend of risk aversion among investors. As long as exchange inflows remain elevated, the potential for a sustainable recovery appears limited.

Impact on the Crypto Market

• The decline in XRP’s price reflects a broader trend of fear and uncertainty in the altcoin market.
• Increased selling pressure may lead to further price corrections across other cryptocurrencies.
• The shift in investor psychology could deter new investments in XRP and similar assets.
• Elevated exchange inflows suggest that many holders are opting to sell rather than accumulate, which could prolong bearish conditions.
• The potential for deeper retracement levels may create opportunities for opportunistic traders, but overall market sentiment remains cautious.