XRP has experienced a 9% decline in value since it hit an all-time high of $3.41 on January 16, 2025. This drop is largely attributed to a significant increase in profit-taking activity among traders, putting pressure on the price. As a result, the asset could face continued downward momentum unless there is a reduction in the current selling spree.
The Surge in Profit-Taking
XRP’s recent price action has been heavily influenced by profit-taking, as evidenced by on-chain data from Santiment. The Network Realized Profit/Loss (NPL) metric for XRP has been consistently positive in recent days, signaling that more holders are selling their tokens at a profit than at a loss.
The NPL metric helps track the difference between the price at which an asset was last moved and its current market price. When the NPL is positive, it suggests that a higher number of investors are selling their holdings for profit, which can increase the supply in the market. If demand doesn’t keep pace with the sell-offs, this can lead to downward price pressure.
According to Santiment’s data, the NPL of XRP has been rising steadily over the past week, reflecting the growing number of traders cashing in on their gains. This selling activity has intensified as the coin reached new highs, leading to a cooling effect on its price.
Exchange Flow Balance Shows Increased Sell-offs
In addition to the positive NPL readings, XRP’s Exchange Flow Balance has also surged by 105% since January 17. This metric tracks the net movement of tokens into and out of exchanges, and a spike in this balance typically indicates a surge in deposits, suggesting that traders are preparing to sell.
The rise in XRP’s Exchange Flow Balance highlights the growing sentiment of profit-taking in the market. When more tokens are deposited into exchanges, the increased sell-off pressure often leads to price declines if the demand doesn’t match the influx of supply.
XRP Price Prediction: Could it Drop to $2.45?
As of now, XRP is trading at $3.09, down from its peak of $3.41. If the current sell-offs persist and demand remains weak, there is a possibility that XRP could experience further declines. The next significant support level for XRP lies around $2.45, a price point where many traders expect buying interest to step in.
However, the situation could change if profit-taking slows down. If investors start holding onto their XRP or if buying pressure increases, the price could rebound. In that case, XRP could make an attempt to reclaim its all-time high of $3.41 or even surpass it, depending on broader market conditions and sentiment.
Factors That Could Impact XRP’s Price in the Short-Term
- Sell-offs Subside: If traders reduce their profit-taking activity, XRP could see a potential reversal in its price action. This could set the stage for the price to reclaim previous highs.
- Support at $2.45: The support level at $2.45 is crucial for XRP. If the price reaches this point and holds, it could set a foundation for a future rally. Strong support often indicates a point where buying pressure might increase.
- Market Sentiment: Broader market trends, including movements in Bitcoin and Ethereum, could also influence XRP’s price. If the overall crypto market remains bullish, XRP could follow suit, but continued sell-offs could lead to further declines.
Conclusion: What’s Next for XRP?
XRP’s price is facing downward pressure as a result of rising profit-taking activity. While this has led to a 9% drop from its all-time high, the cryptocurrency could still see a rebound if profit-taking slows and demand picks up. For now, traders are closely watching the $2.45 support level to gauge if further declines are imminent.
As always, cryptocurrency markets are volatile, and XRP’s future performance will depend on the balance between profit-taking and market demand. If you’re holding XRP, it may be worth keeping an eye on these key metrics to determine whether the current dip is an opportunity or a sign of further weakness.
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