Why Ripple’s XRP Price Risk Drops Lower

Ripple’s native token, XRP, was hovering around $0.38 despite the mid-March rally that saw the crypto market cap rise by 28%. Its poor price performance may be compounded as crypto whales appear to have entered a selling spree.

Ripple Whales Seller

XRP holders missed the upside of the recent crypto rally, as prices fluctuated between $0.35 and $0.38 over the past 30 days. On-chain calculations now project a bearish outlook for the third-largest cryptocurrency by market capitalization.

Data from forensic blockchain firm Santiment reveals that XRP whales have conspicuously gone into a selling frenzy, despite the recent bull rally that pushed the crypto market cap above $1.1 trillion.

Crypto whales with balances of 10 million to 100 million XRP have unloaded 30 billion XRP worth around $11 million. Between March 9 and March 20, this cluster of whales depleted their holdings from 4.42 billion to 4.1 billion XRP tokens.

A closer look shows that crypto investors with between 10 million and 100 million XRP have become increasingly savvy in recent months. Since the FTX crash contagion in November 2022, they have often sold just before prices fall and accumulated again near local bottoms.

If this trend continues, the current sell-off poses a bearish outlook for the XRP price in the coming weeks.

Another factor underlining a bearish outlook for XRP is the declining developer activity on the Ripple-backed network. As of March 20th, developer activity has fallen by more than 60% since mid-February.

Development activity indicates how much attention and resources are devoted to improving the XRP Ledger, adding new features and expanding its capabilities. A sustained decline constitutes a negative signal as investors may interpret it as a lack of community interest and technical support, which could further weaken the long-term price outlook of XRP.

XRP Price Prediction: When Bottom?

The Market-Value-to-Realized-Value (MVRV) calculation provides relevant data for upcoming XRP price actions. Most holders who bought XRP in the last 30 days are sitting on almost 5% unrealized losses. A critical look at the recent bear market patterns shows that XRP holders have a tolerance of 10% losses before they stop selling.

This means that XRP could fall towards $0.33 in the coming weeks. And if this stop doesn’t hold, selling could continue until the XRP price falls by 25% towards $0.29.

If XRP can shake off the current bearish signals, the price could rise until most holders start booking some gains at $0.42, around the 13% profit line. This could result in a shift in market sentiment that triggers an increase in buying pressure, consequently extending the rally towards $0.49.