On January 28th, the price of XRP temporarily fell below $0.68, marking the first decline in recent times. Following a long-awaited legal victory against the SEC, the price of XRP reached a high of $0.84, the highest in a year. However, over the past two weeks, the price seemed to stagnate around $0.70, causing long-term investors to question further upside potential.
Around January 28th, the increase in selling pressure from long-term holders became apparent, as shown by data from Santiment. The metric “Age Consumed” indicated a sharp increase in XRP’s age consumed, rising from $8.89 billion on January 22nd to $0.70 billion on January 28th, subsequently triggering a 9% price correction, breaking the $0.68 mark.
The chart also showed further spikes to $3.1 billion and $1.1 billion on January 31st and February 3rd respectively. This metric measures real-time changes in trading activity of long-term investors, considering the amount of tokens traded recently and the time since the last change.
The continued surge in this metric suggests that a large amount of long-held tokens have been transferred in recent days, which could lead to a long-term price decline if not met with sufficient market demand.
Another concerning sign is the decrease in trading volume on the XRP Ledger network after the legal victory. Following positive developments, trading activity significantly declined, reaching only 277 million XRP on February 1st, compared to 1 billion on January 13th.
With long-term holders continuing to exit positions, this further reinforces the bearish outlook. In the face of selling pressure and declining network activity, XRP may struggle to maintain its current high price.
In the current scenario, the key support level for XRP is around $0.65. If long-term holders continue to sell at the current pace, the price could drop to $0.60. However, the initial support level could be at $0.65, and if this support level drops by 30%, investors who bought XRP in the past 5 days may seek to reduce losses.
On the positive side, if XRP can break through the resistance level of $0.75, it may regain momentum, although given the current trading activity levels, this scenario seems unlikely to occur.
In conclusion, the recent decline in XRP prices and continued selling by long-term holders indicate a bearish outlook for this digital asset. The key support level at $0.65 is crucial, with a breakthrough potentially leading to further decline towards $0.60. Conversely, breaking the resistance level of $0.75 could signal a potential recovery, but due to the current market conditions, there remains uncertainty.