Ripple’s XRP has seen a significant increase recently, reaching an all-time high of $3.41 on January 16. However, this rally has triggered a wave of profit-taking from investors. traders, threatening the sustainability of recent gains.
With increased selling pressure, XRP is likely to reverse the current trend.
Ripple Price Boost Not Supported by High Demand
During the 7th trading session, the outflow from the XRP spot market amounted to 74 million USD. This is the highest single-day cash outflow in the past 30 days. This trend of profit-taking started after the altcoin hit its all-time high on January 16.
When an asset records cash outflows, this indicates investors may be selling or withdrawing money. This points to caution or a lack of confidence, as some constituents may be taking profits or moving assets elsewhere.
Large outflows like that of XRP can put downward pressure on prices, as more sellers enter the market, creating a negative feedback loop that leads to additional selling and steeper price drops.
Furthermore, the decline in XRP’s daily trading volume confirms the increase in sell-offs. Over the past 24 hours, the price of this Token has increased by 2%, however trading volume plummeted by 26% in the same period, creating a negative divergence.
This divergence suggests that XRP’s price rally over the past 24 hours may not be sustainable and could reverse or consolidate.
XRP Price Prediction: One of Two Scenarios
At the time of writing, XRP was trading at $3.19. If the sell-off continues, the Token’s price will continue to decline from its all-time high of $3.41 to support at $2.45.
However, if the current uptrend maintains, XRP could return to its all-time high and surpass it.