XRP struggles at $3: Will whale offloading drag it lower? 

Key Takeaways

XRP price has dropped over 20% since mid-July. But the pullback could extend if the $2.8 immediate support cracks. 

Ripple’s [XRP] price weakness may be far from over, according to crypto analyst Ali Martinez. The altcoin has dropped over 20% after peaking near $3.6 in mid-July, with most of the sell pressure from whales. 

Over the past three weeks, whale wallets with 1 million to 1 billion XRP tokens trimmed their holdings from over 10 billion to 8 billion, meaning about $6B worth of XRP were sold from this large players. 

Source: Santiment

More trouble for XRP bulls?

The distribution from the above cohort was not yet over as of press time; hence, the XRP pullback may extend. 

In fact, Martinez noted that a bearish signal, MVRV death cross, was also flashed, further reinforcing short sellers’ dominance. 

Source: X

The last time the indicator was triggered in late March, XRP dropped over 30% from $2.4 to $2.0. If the trend repeats, a more discounted buying window could open up. 

But how far can the altcoin drop from the press time value of $2.9? Per Martinez, the $2.8 was also a key support, but a major floor could be found at $2.48 from an on-chain perspective. 

Source: X

The on-chain chart showed most current holders scooped the altcoin between $2.2 and $2.48, making it a key downside risk level to watch. 

Interestingly, price charts also marked out similar levels near the 200-day Simple Moving Average (SMA). This suggested that XRP could plunge by an extra 15% if broader market sentiment sours.  

Source: XRP/USDT, TradingView

However, some traders had begun increasing their exposure to the altcoin. According to CoinGlass, smart Binance traders increased long positions from 64% to 69% — a 5% surge in the past two days. 

This followed sharp trimming of long positions from 79% to 64% between mid-July and early August.  In other words, some large players appeared to be convinced that XRP’s bottom was in. 

Source: CoinGlass

Overall, XRP has dropped over 20% amid Bitcoin’s [BTC] pullback. Although BTC was yet to confirm a price bottom above $110K amid macro uncertainty, some traders were already buying the XRP dip.

However, a robust XRP support could be established at $2.48 if $2.8 cracks.