The digital currency XRP from Ripple experienced a significant rise in value, reaching an unprecedented peak of $3.41 on January 16. This upward trend has sparked a flurry of selling among investors, and if this continues, it could jeopardize the longevity of its recent price increase.
With mounting selloffs, XRP is poised to reverse the current trend.
Ripple Rally Not Backed By High Demand
On Saturdays trading day, a total of $74 million was withdrawn from XRP’s spot markets. This is the largest single-day capital outflow for XRP in the last 30 days. This action seems to be part of a trend where people are cashing out after the altcoin reached its peak price on January 16.
If an asset encounters sudden withdrawals, it often means investors are either liquidating their holdings or transferring them to other investments. This could signal apprehension or reduced trust, as some market players might be cashing out their gains or shifting their funds.
Significant quantities of assets similar to XRP being released for sale could potentially lower an asset’s value by increasing the number of sellers in the market. This increase in supply without a corresponding demand might trigger a chain reaction, causing more sellers to join and accelerating the drop in price.
Furthermore, the drop in XRP’s daily trading volume suggests an increase in selling activity. In fact, over the last 24 hours, the token’s value has risen by 2%. Yet, its trading volume significantly decreased by 26% within the same timeframe, leading to a negative divergence.
This occurs when an asset’s cost increases significantly while its transaction activity decreases dramatically. This situation suggests a weakening of the upward trend because the price rise isn’t supported by widespread market involvement.
This difference indicates that XRP’s recent surge over the last 24 hours might not hold up long-term and could potentially lead to a correction or a period of stabilization.
XRP Price Prediction: One of Two Things
Currently, one XRP is being traded for approximately $3.19. If selling persists, the value of the token may drop even more from its peak of $3.41, reaching a potential support level around $2.45.
However, if it sustains its current uptrend, it will revisit its all-time high and rally past it.
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2025-01-19 11:32