XRP has been experiencing increasing selling pressure since reaching a three-year high of $1.63 on November 23. Currently trading at $1.41, XRP has lost 13% of its value since then. On-chain data suggests that profit taking has increased over the past few days, which could lead to a further decline in XRP prices. Crypto analyst Abiodun Oladokun made statements on how XRP investors should evaluate this situation.
According to Abiodun Oladokun, there has been a marked increase in profit-taking activity among XRP holders. According to Santiment data, XRP’s realized profits in the last seven days reached $1.84 billion, the highest level since April 2021. This metric shows the total profit realized on the network compared to the price at which the tokens were last sold. Increased profit-taking is a common trend during periods of high trading volumes in the market, reflecting changes in investor sentiment and generally putting downward pressure on prices.
In particular, long-term XRP holders are seen selling, contributing to the negative pressure on the price. The decline in XRP’s Average Dollar Investment Age (MDIA) metric suggests that long-term investors are starting to make a profit by selling their holdings. This metric tracks the average age of all dollars invested in an asset, and a decline in MDIA indicates that older coins are being transferred or spent more. The decline in MDIA during XRP’s recent price rally suggests that long-term holders are actively selling, putting pressure on the price.
According to analysts, 90% of the XRP supply is currently in profit. This means that most XRP holders are making a profit. In current market conditions, about 97% of the token’s total supply is in profit. The price movement of XRP will depend on whether investors continue to take profits.
Abiodun Oladokun notes that XRP has found strong support at $1.33. The token, currently trading at $1.41, could test this support due to profit taking. If the $1.33 support level is broken, the price could fall further and drop to $1.28. However, if buying activity picks up again, this bearish scenario will be invalidated and the XRP price could rise again to $1.63.
XRP investors will need to closely monitor market dynamics to ensure that support levels are not broken and buying activity resumes.