XRP Sell-Off: Price Drop Imminent?
XRP Faces Mounting Sell Pressure
Recent days have witnessed a significant increase in XRP selling pressure, raising concerns about a potential price drop. While XRP saw initial gains, a 5.26% drop in the past 24 hours paints a bearish picture. This downward trend is fueled by several factors, impacting both active addresses and derivatives markets.
Increased Active Addresses, Then a Sharp Decline
Glassnode data initially showed a 620% surge in active XRP addresses, from 74,589 to 452,650. This spike, usually indicative of increased demand, led to a price rise. However, this increase peaked on March 2nd and has since significantly declined. This suggests many new entrants are quickly selling their holdings.
Source: Glassnode
Bearish Signals in Derivatives Market
The derivatives market further confirms this bearish sentiment. The Open Interest Weighted Funding Rate, a key metric reflecting market sentiment, has plummeted from 0.0103% on March 3rd to -0.0022%. A negative rate signifies selling pressure, and the current rate indicates sellers are increasingly dominant.
Source: Coinglass
Additionally, the ratio of long-to-short positions has dropped below 1.0 to 0.9798. A further decline below 0.9 could exacerbate losses.
Spot Market Sell-Off
Spot market data reveals significant selling pressure, particularly from U.S. retail investors. Exchanges like Coinbase and Kraken saw a combined $34.68 million in XRP sell-offs, while Bybit and Binance recorded a net buy of $34.45 million. This results in a net flow of $230,000 in selling.
Source: Coinglass
Continued selling could wipe out XRP's recent gains, potentially pushing investors into a loss.
Conclusion
The confluence of decreasing active addresses, negative funding rates, and significant spot market selling suggests a strong bearish trend for XRP. While the situation remains fluid, investors should carefully monitor these indicators and adjust their strategies accordingly. Need help navigating the complexities of the crypto market? Codeum offers expert services, including smart contract audits and tokenomics consultation to mitigate risks and optimize your blockchain projects.