XRP whales have been on a three-month sell-off. Recent movements have pushed prices down once again, but does this present a chance to buy the dip?
After a year of huge gains, Ripple is starting to display bearish signals. As of Monday, 22nd, it is down 3% to $2.85. There had been clear attempts to keep the cryptocurrency above $3.00, but a range of macroeconomic factors and uncertainty prevented it, as the rest of the cryptomarket suffered from a downward spiral. However, there are signs that major and consistent whale sell-offs are beginning to abate and relieve pressure.
The Impact of Whales on XRP
Since August 26th, whale inflows have collapsed by 90% for XRP. Since this date, activity in the 100K–1M range has sunk by 95%. Those in the $1 million-plus market have crashed by 93%. According to crypto exchange Binance, the current XRP USD ratio stands at $2.8669 as of September 23rd. This is a mild recovery from Monday’s crypto market slide, in which its price dropped from previous levels above $3.00..
There were several big whale dumps in August and September that really spooked the markets. When XRP hit its all-time peak of $3.65, the sell-offs began. Around $6 billion was sold off since mid-July, with even co-founder Chris Larson selling $26 million of XRP. When this had happened previously, XRP had seen a 40% cut in its value.
This continued, and in mid-September, two huge sell-offs caused a major price crash. Whales sold off 160 million XRP over a period of two weeks. With a fiat value of around $500 million, this caused a price reversal, with aggressive selling continuing. On the week starting September 8th, 40 million XRP was sold in one day, though the currency did manage to hold above the $3.00 support level. It even climbed somewhat before a minor retracement.
Where Will XRP Go Next?
There are technical indicators that a further downward price trend could be on the cards. Movement from the XRP/USD one-day chart on the 22nd of September indicates that the Moving Average Convergence Divergence has formed a crossover. This has crossed below the signal line, suggesting that its momentum is dwindling. It is the second time in a month that this has happened, the first being on September 8th.
There are contradictory signs that things may be getting better. A rate cut by the FED has signalled that a liquidity rotation is likely to benefit the crypto market, including XRP. According to Binance, ‘The FED’s rate cut reduces the appeal of cash, historically leading to capital rotation into risk assets. Digital assets are now firmly in the mix, with potential spot altcoin ETFs in October poised to expand investor access. Historically, when the Fed cut rates near all-time equity highs, the S&P 500 delivered a median +9.8% return in the following 12 months, suggesting a similar liquidity-driven tailwind could support BTC and altcoins such as XRP.
Rate cuts are, however, not the golden ticket many have predicted, and further macroeconomic factors will need to change to propel the crypto market further, including XRP. Binance also noted that historically, cuts near equity all-time highs have preceded 12-month rallies. If crypto mirrors this precedent, momentum could extend into Q4. However, sticky inflation and fragile labor conditions pose risks to the easing cycle and broader market outlook.
This large-scale selling pressure is beginning to evaporate. This has led many to believe that XRPs’ next major price movement is on its way. When whale inflows like this stop, it usually means large selling periods are over. This creates a more bullish environment, where prices are more likely to move up as downward pressure fades.
The Long Term Outlook for XRP
Financial expert Dr. Jim Willie has also waded into the argument and believes that the price of XRP is actually being held down deliberately. He believes large banks and financial institutions are deliberately not letting the XRP price go up in value. The main reason is that they believe XRP will be a key part of financial institutions in the future, suggesting a positive long-term outlook.
When it comes to levels, $3.00 is the next big one to watch for XRP. With this whale pressure decreased, it is possible, and a breakout here could push it further toward $3.30 or even $4.00 by the end of the year. However, even a lower support zone of $2.65 could signify a later breakout. Should this lower level be breached, it may bring about a further slide to $2.50 or below.
What XRP really needs is stronger market support from both Bitcoin and Ethereum. News of new ETF products could help this, and the Ripple blockchain is even launching a new stablecoin product in collaboration with other Fintech companies. While this may benefit Ripple itself, it will be one to watch. The rise in the stablecoins sector could be at the detriment of XRP itself, as people rush to use them for the primary purpose of cross-border transactions.