XRP price under pressure amid technical weakness and reduced whale holdings
- XRP holds below $1.90, weighed down by a deteriorating technical picture as the RSI edges lower.
- The XRP Ledger faces a significant slump in on-chain activity, with newly created addresses averaging 3,440.
- XRP whales persistently reduce risk exposure, with the value held by addresses with more than 100,000 tokens falling to $104 billion.
Ripple (XRP) is extending its decline below $1.90 at the time of writing on Tuesday, as headwinds intensify across the crypto market. Negative market sentiment has persisted despite a surge in inflows to XRP spot Exchange Traded Funds (ETFs).
As reported, US-listed XRP ETFs posted nearly $44 million in inflows on Monday, up from approximately $13 million on Friday. The cumulative net inflow stands at $1.12 billion, and net assets at $1.25 billion.
XRP Ledger on-chain activity dips
The number of newly created addresses on the XRP Ledger (XRPL) has remained relatively suppressed, averaging 3,440 as of Monday, down from 4,501 on December 1 and approximately 13,500 on November 11.
A low number of active addresses indicates that adoption of XRP on the protocol has declined, which in turn reduces demand. Unless a reversal occurs and new addresses increase, it could be difficult for XRP to sustain its recovery amid headwinds.
Meanwhile, the Supply Distribution metric shows that the notional value held by addresses with over 100,000 coins has declined to approximately $104 billion as of Monday, from nearly $106 billion on Sunday and almost $108 billion, recorded on December 1.
Glassnode’s chart below highlights a steady decline in the value held by this cohort of investors, whose average value was $129 billion on October 10 and $191 billion on July 21. XRP reached a new record high of $3.66 on July 22 but gradually trimmed gains in the following months until the October 10 crash, which accelerated the decline to $1.25.
If the whales continue reducing exposure, overhead pressure will persistently overwhelm demand, keeping the XRP price in a downward spiral.
Technical outlook: XRP edges lower amid a weakening technical structure
XRP is trading at $1.87 at the time of writing on Tuesday, while holding below the falling 50-day Exponential Moving Average (EMA) at $2.12, the 100-day EMA at $2.31 and the 200-day EMA at $2.40, which keeps bears in control. The Relative Strength Index (RSI) has declined to 39 within the bearish region. A persistent decline below 40 leaves room toward 30 before oversold conditions emerge, while a push above 50 would strengthen an upside bias.
Meanwhile, the Moving Average Convergence Divergence (MACD) showcases marginally positive histogram bars. Despite the blue MACD line staying above the red signal line, momentum is fragile. A close below Friday's low of $1.77 would open the door for extended losses toward April's support at $1.61.
A recovery would need a daily close above the 50-day EMA at $2.12 to ease bearish pressure, opening scope toward the 100-day EMA at $2.31 and the 200-day EMA at $2.40. Failure to reclaim this EMA band would keep the downtrend intact. If the MACD histogram slips back into negative territory, selling pressure could rebuild.
Crypto ETF FAQs
An Exchange-Traded Fund (ETF) is an investment vehicle or an index that tracks the price of an underlying asset. ETFs can not only track a single asset, but a group of assets and sectors. For example, a Bitcoin ETF tracks Bitcoin’s price. ETF is a tool used by investors to gain exposure to a certain asset.
Yes. The first Bitcoin futures ETF in the US was approved by the US Securities & Exchange Commission in October 2021. A total of seven Bitcoin futures ETFs have been approved, with more than 20 still waiting for the regulator’s permission. The SEC says that the cryptocurrency industry is new and subject to manipulation, which is why it has been delaying crypto-related futures ETFs for the last few years.
Yes. The SEC approved in January 2024 the listing and trading of several Bitcoin spot Exchange-Traded Funds, opening the door to institutional capital and mainstream investors to trade the main crypto currency. The decision was hailed by the industry as a game changer.
The main advantage of crypto ETFs is the possibility of gaining exposure to a cryptocurrency without ownership, reducing the risk and cost of holding the asset. Other pros are a lower learning curve and higher security for investors since ETFs take charge of securing the underlying asset holdings. As for the main drawbacks, the main one is that as an investor you can’t have direct ownership of the asset, or, as they say in crypto, “not your keys, not your coins.” Other disadvantages are higher costs associated with holding crypto since ETFs charge fees for active management. Finally, even though investing in ETFs reduces the risk of holding an asset, price swings in the underlying cryptocurrency are likely to be reflected in the investment vehicle too.
(The technical analysis of this story was written with the help of an AI tool)
Author
John Isige
FXStreet
John Isige is a seasoned cryptocurrency journalist and markets analyst committed to delivering high-quality, actionable insights tailored to traders, investors, and crypto enthusiasts. He enjoys deep dives into emerging Web3 tren
