Ripple’s XRP is fragile and it looks like that won’t change anytime soon. Even though there is a minimal risk of an immediate collapse, one wonders… are XRP rallies having trouble holding up?
Reserves hold even in periods of low prices
Recent data showed that the XRP Ledger’s foreign exchange reserves stood at 2.76 billion, even as XRP traded near $1.3 and continued to fall. This is important because increasing reserves during times of weakness often means there are more tokens to sell.
Furthermore, this is a departure from ancient times, when reserves and prices moved in tandem. However, this is no longer the case, and the rebounds could therefore be satisfied thanks to the air offer.
On top of that, Binance’s exchange supply share was also high (nearly 2.76 at press time), even though prices were falling. Therefore, a significant portion of XRP remains in circulation.
This selling pressure has so far led to sideways movements or declines, unless foreign exchange reserves start to decline.
Past periods of increasing Binance reserves have sometimes preceded XRP withdrawals. In fact, supply on the stock exchanges often exceeded demand. The current situation seems quite similar.
Peak whale trade flows
Now consider this.
According to CryptoQuant, Whale to Exchange transactions have increased several times. Flows have recently exceeded 40,000 and, at past extremes, have approached 60,000.
These explosions were accompanied by price drops. Large holders can move tokens to exchanges for distribution.
All of this is reserve ready to be sold, making rebounds more difficult. Additionally, rallies frequently encounter resistance as large holders use their strength to exit their positions.
XRP is improving, but no one is confident
At press time, XRP was trading around $1.43, posting a modest gain of 2.7%. Recovery may be underway. The RSI was above neutral, while the MACD turned positive with a new bullish crossover. However, the movement is weak.
Buyers are stepping in, but not aggressively enough to reverse the trend. Unless XRP can break out above the $1.50-$1.55 range, these gains will fade… especially if XRP is ready to sell.
Final summary
- XRP under pressure as 2.76 billion tokens remain on exchanges.
- With whale influxes above 40,000 and 60,000, any short-term gains are fragile.
