In November 2024, Ripple established strong bullish dominance after XRP entered the $2 region for the first time in its history. Since this level was regained, the price action first held above $2 and then reached an all-time high of $3.68.
This bullish phase lasted more than a year.
However, on December 15, XRP fell below the $2 threshold, marking a move towards increasing bearish dominance.
AMBCrypto outlined the factors behind this reversal and what they could mean for the altcoin’s prospects.
Long-Term Investors Show Fading Conviction
One of the first signs of bearish momentum came from long-term holders. These investors are defined as addresses that have held Ripple (XRP) for more than 155 days without making a transaction.
Data from Glassnode showed that holders aged five to seven years made around $721.5 million in profits on December 11. At that time, XRP closed near $2.03, while the average basis cost hovered around $0.40.
Source: Glassnode
When profit-taking occurs with such a large gap between the cost basis and the market price, it indicates a lack of long-term conviction in the future upside potential of the asset.
Long-time holders are not alone in their exit decision. Ripple co-founder Chris Larsen had sold over 200 million XRP months earlier.
As veteran holders retreated, concerns grew about the altcoin’s long-term bullish narrative.
Institutional investors retreat
Institutional investors have also started to pull back, as evidenced by the steady decline in buying activity over the past month.
US XRP Spot exchange-traded funds (ETFs) saw a sharp change in flows. Buying volume fell from $246.05 million in November to just $8.54 million at the close of trading on December 16.
This represents a 96.49% decline in purchasing activity, highlighting deteriorating sentiment among traditional investors.
Source: CoinGlass
The bearish pressure has also spread to the broader market.
XRP exchange reserves have climbed to 2.66 billion tokens, indicating that a larger supply is readily available for potential sales.
If these reserves were to enter the market, the price could face further pressure below the $1.88 level at press time.
Notably, institutional capital outflows began before retail. Retail traders appeared to react after long-term holders began to withdraw.
If these sales persist, downside risks could accelerate.
Whales remain largely inactive
Whales, investors who control large pools of liquidity capable of influencing the direction of the market, have so far demonstrated a muted response.
The Whale-to-Exchange Flow metric, which tracks the volume of coins moved between whale wallets and exchanges, has fallen to zero. This indicates an absence of significant activity carried out by the whales.
Source: CryptoQuant
The last notable movement of the whales took place on October 25. Shortly after, XRP fell from around $2.6 to around $2.2.
Since then, the whales’ behavior was in stark contrast to the active period from July to October. If whales start moving funds again, historical trends suggest further downside risk.
Despite this, spot market data showed stronger purchase activity from takers. This demand has helped stabilize XRP price action in the short term.
Final Thoughts
- XRP’s recent weakness reflects a broader confidence reset rather than just a catalyst.
- With long-term holders and institutions withdrawing, price direction may depend on whether new demand replaces existing supply.
