Massive sell-off from long-term holders, among other on-chain metrics, suggests that the recent XRP rally may be shortlived. Where will the support army converge?
Long-term holders liquidate their positions as XRP hit the 2023 high last week. The divergence between Price and Daily Active Addresses could exacerbate the XRP sell-off frenzy in the coming weeks.
XRP Long-term Holders Turn Paper Hands
XRP soared in late March to end Q1 2023 positively as investors grew confident of a victory in the Ripple vs. SEC lawsuit outcome. As market euphoria hit, on-chain data reveals how long-term holders liquidated their positions as prices rose in the past week.
According to Santiment, the Mean Coin Age of the XRP ledger native token has declined since March 6. But after the price surged 27% around March 19, it took another downturn. Between March 6 and April 3, the XRP Mean Coin Age decreased considerably from 57.97 days to 24.97 days.
Ripple (XRP) Mean Coin Age, Source: Santiment
The Mean Coin Age (90d) measures the average number of days that on-chain assets have remained in their current address. A sustained downturn in the Mean Coin Age indicator implies that long-term holders are increasingly selling off their coins.
More so, the stark divergence between the recent price action and XRP network traction further corroborates the bearish stance.
As shown below, the daily traction declined massively on the network from 871,000 on March 19 to 26,000 active addresses as of April 3. This shows that while price surged 34%, the daily active wallet addresses moved nearly 97% in the opposite direction.
Ripple (XRP) Daily Active Addresses. Source: Santiment
A price surge not accompanied by commensurate growth in underlying network traction is unlikely to evolve into a prolonged rally. With a victory in the Ripple vs. SEC lawsuit now partially priced in, this decline in Mean Coin Age and network traction could cast a bearish cloud on the native coin’s long-term price prospect.
XRP Price Prediction: $0.45 Support Could Stop the Slump
According to Santiment’s Market Value to Realised Value data, most crypto investors that bought XRP in the last 30 days would realize 10% profits if they sold today.
However, historical data shows that XRP holders could watch prices dwindle toward $0.49, around the 6% profit line, before they stop selling. But if that support line does not hold, they may continue taking profit until the price drops to $0.45. In this area, they would be at a 4% loss.
Ripple (XRP) MVRV data. Source: Santiment
In contrast, the bulls could be back in the game if XRP makes it past $0.56 at the 20% profit line. At this zone, many holders could look to take some profit. But if that profit-taking zone does not derail the rally, it may zoom past the $0.60 milestone.
Disclaimer
In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.
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