XRP price drops alongside mass profit taking by Ripple holders
- XRP price dropped to $0.62 on Friday as holders took $368.79 million in profits in the past week.
- The deadline for the SEC vs. Ripple lawsuit for the regulator's remedies-related opening brief is March 22.
- XRP trade volume observed a spike several times this week as on-chain activity in the altcoin peaks.
XRP price dipped to $0.62 on Friday, sustaining above the psychologically important $0.60 level despite increased profit-taking activities from the altcoin’s holders. The altcoin is set to close the week with mild losses, correcting slightly from the recent price recovery, ahead of a key deadline in the long-standing SEC vs. Ripple lawsuit on March 22.
Also read: XRP price drops below key support ahead of SEC’s remedies-related brief in Ripple lawsuit
Daily digest market movers: XRP holders engage in profit-taking activities in March
- XRP holders have taken $370 million in profits in the past week, since the beginning of March 2024. This could be one of the main reasons of the price correction seen in the last few days.
- According to on-chain data from Santiment, XRP holders have taken profits consistently throughout March, as the altcoin climbed to a peak of $0.6685 on Tuesday.
 [10.41.36, 08 Mar, 2024]-638454744686211401.png)
Network Realized Profit/Loss. Source: Santiment
- XRP has noted a spike in its on-chain activity, with an increase in Active Addresses and Whale transactions valued at $100,000 and higher. Both metrics have spiked in the past week. By itself, an increase in active addresses and transactions from large-wallet investors can be bullish or bearish for the asset's price. However, if transactions spike after a price rally –like the recent one seen for XRP– it could mean that whales are looking to sell and book profits.
 [10.44.29, 08 Mar, 2024]-638454745016668927.png)
XRP Active Addresses and Volume. Source: Santiment
- The SEC vs. Ripple lawsuit's next important deadline is March 22, the opening brief in the remedies-related discovery.
- The altcoin's price has declined despite rising trade demand, likely in response to selling pressure from traders' profit-taking activities.
Technical Analysis: XRP price could sweep lows before recovery
If selling pressure persists, XRP price could sweep the $0.57 low, represented by the 50% Fibonacci retracement level of the rally to its 2024 high of $0.6685.
The Moving Average Convergence/ Divergence (MACD) indicator and the Awesome Oscillator (AO) suggest that a sweep of support at $0.57 is likely before the altcoin's price can recover.
XRP/USDT 1-day chart
However, a daily candlestick close above the 78.6% Fibonacci retracement level at $0.62 could invalidate the thesis of a sweep of support. Should XRP price also overcome the $0.66 resistance level, it could rally towards its December 2023 high of $0.70.
Bitcoin, altcoins, stablecoins FAQs
What is Bitcoin?
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
What are altcoins?
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
What are stablecoins?
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
What is Bitcoin Dominance?
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
