Ripple (XRP) cleared $0.45 for the first time since November 2022. However, a closer look at some critical on-chain data has revealed a selling trend among whale investors. By how much could XRP retrace in the coming weeks?
Retail investors are buying after the recent price surge, but whale investors appear to be taking profits.
Ripple (XRP) entered a 27% price surge on March 21. The price increase was largely attributed to buy pressure among investors front-running a potential victory in the Ripple vs. SEC case.
XRP price jumped as Ripple published a notice that cited a recent US Supreme court ruling concerning Binance.US’ bid to purchase collapsed crypto lender Voyager Digital. The judge had summarily rejected the SEC’s claims to label Voyager’s VGX token a ‘security’ and BinanceUS, an unregistered securities exchange.
Amid positive market reaction, the XRP whales’ sell-off, among other on-chain metrics, suggests an impending price correction.
According to Santiment, a strategic group of whales have offloaded nearly $140 million worth of XRP coins in the last two weeks.
Between March 9 and March 27, a strategic group of whales offloaded over 300 million XRP, worth approximately $141 million.
Ethereum (ETH) Whales Accumulation, March 2023. Source: Santiment
Considering the 10 million to 100 million XRP whale cluster’s history of timing recent price downtrends accurately, XRP holders should be cautious of a potential downswing in the coming weeks.
Similarly, the recent Ripple notice has sent the positive perception surrounding XRP to euphoric levels. According to Santiment, XRP has recently ripped to the top of the trends tables across various crypto media channels.
As depicted by the red line below, XRP social dominance nearly doubled between March 13 and March 27, rising from 0.94% to 1.78%.
Ripple (XRP) Weighted Sentiment. March 2023, Source: Santiment
When social dominance hits a local high, it typically indicates a euphoric mood among token holders and network participants. This could culminate in an XRP sell-off frenzy as savvy crypto investors look to sell at the top.
XRP Price Prediction: $0.50 is a Major Road Block
The Market-Value-to-Realized-Value (MVRV) is a crucial indicator of XRP’s potential price movements. According to Santiment, it compares the ratio of an asset’s market capitalization to its realized capitalization.
The MVRV chart below shows that most holders who bought XRP coins in the last 30 days are sitting on profits of around 15%. Historical data shows that XRP holders have often sold until the price approaches the 6% profit zone, where they may begin to position for future gains.
As such, they will likely continue selling until the price drops to $0.42. If this support line does not hold, they may sell until XRP approaches the 5% loss line at $0.35, where they look to cut their losses.
XRP Market-value-to-realized-value (MVRV). Source: Santiment
Still, if XRP breaks out of the current bearish outlook, it could approach the 22% zone at $0.50. But if it scales this resistance point, then $0.60 is the next major euphoric market high, where holders may begin to take profit.
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