XRP has witnessed an increase in selling activity since rising to a three-year high of $1.63 on Nov. 23. Currently trading at $1.41, the altcoin has seen a 13% price drop.
On-chain data has revealed a significant increase in profit-taking activity over the past few days. This highlights a potential continuation of XRP’s price decline. What should token holders watch out for?
XRP traders record gains
BeInCrypto’s assessment of XRP’s on-chain performance showed an increase in profit-taking activity among its holders, reflected by the rising profit-taking. According to data from Santiment, XRP’s profit-taking over the past seven days totaled $1.84 billion, the highest since April 2021.
XRP Realized Profit. Source: Santiment
An asset’s network realized profit measures the total profit earned by network participants based on the price at which the tokens were last moved. An increase in this metric indicates that many holders are selling their assets at a significant profit compared to the purchase price.
Furthermore, the trend usually occurs during periods of high market activity. This signals a possibility of profit-taking and suggests changes in sentiment. As this selling pressure increases, the downward price action persists.
In fact, long-term holders of XRP are contributing to the downward pressure on its price. They have taken advantage of the token’s rise to a multi-year high to realize gains, as evidenced by the decline in the asset’s Average Dollar Age Invested (MDIA) over the past week.
Average Invested Dollar Age of XRP. Source: Santiment
This metric tracks the average age of all dollars invested in an asset, reflecting how long tokens have been held in wallets. When it drops, it indicates increased activity on the network as older coins are being moved or spent.
Long-term movement and profits drive XRP forecast
As in the case of XRP, when MDIA drops during a price rally, long-term holders are actively selling their assets, contributing to the downward pressure on the altcoin’s price. The reason for this is not difficult to understand.
The percentage of XRP supply in profit recently surpassed 90%. Thus, the majority of XRP holders are now in profit. At the time of writing, almost 97% of the 99 billion tokens circulating supply is in profit.
Total XRP Supply in Profit. Source: Santiment
XRP Price Prediction: Risk of Falling Below $1.30
XRP is currently trading at $1.41, above the support formed at $1.33. Continued profit-taking activity by token holders will push XRP price to test this support level. However, if it fails to hold, the downtrend will strengthen, and the XRP price decline could extend to $1.28.
XRP Price Analysis. Source: TradingView
On the other hand, this bearish projection will be invalidated if buying activity resumes. This could push XRP price towards revisiting its three-year high of $1.63.
The article XRP Plunges as Traders Withdraw $1.84 Billion appeared first on BeInCrypto.
