XRP Price Faces Mounting Pressure from Whale Sell-Offs and Declining Network Activity

Concerns surrounding XRP’s price trajectory are intensifying as the cryptocurrency faces dual challenges: significant sell-offs by large investors, commonly referred to as whales, and a notable drop in activity on the XRP Ledger (XRPL). These factors, combined with bearish technical indicators, suggest potential declines toward the $2 price range.

Failure to Sustain $3 Support Amplifies Bearish Momentum

XRP has recently been caught in a descending triangle pattern on its daily chart, a technical formation often associated with bearish reversals. This pattern, characterized by a flat support line and a progressively lower resistance line, emerged after XRP surged to a multi-year high of $3.66 earlier this year.

On September 16, Cointelegraph reported XRP’s failed breakout above the triangle’s upper boundary—what was later confirmed as a “fake-out”—resulting in the price retreating below the critical $3 mark. Currently, the $3 threshold aligns with the 50-day moving average, but without a rebound, XRP risks testing lower support levels.

Key levels include $2.70, followed by the 200-day moving average at $2.50. If downward momentum persists, the descending triangle’s downside target of $2.06 looms—a staggering 31% potential decline from current price levels.

Additional bearish signals come from daily XRP/USD charts, which reveal the formation of a bear flag pattern. A loss of $3 support within this pattern suggests a likely dip to $2.40. Despite these indicators, some analysts maintain optimism, noting that reclaiming the $3 threshold could reignite buying interest. This could position XRP to challenge resistance levels at $3.20, $3.40, and possibly reclaim its year-high of $3.66.

Whale Sell-Off Intensifies Selling Pressure

Large-scale sales by XRP whales have further compounded selling pressure during the cryptocurrency’s recent rally near $3.10. On-chain data reveals wallets holding between 1 million and 10 million XRP have significantly reduced their holdings, collectively dropping to 6.79 billion tokens—marking a six-week low.

Over the past two weeks alone, approximately 160 million XRP, valued at $476 million at current market rates, have been offloaded. This trend suggests whales are banking on short-term price declines and cashing out profits in the interim.

Such profit-taking coincides with broader market optimism stemming from potential Federal Reserve interest rate cuts and anticipation around spot ETF approvals. However, whale behavior may undercut bullish sentiment, further exacerbating XRP’s price struggles.

Adding to selling pressure is an increase in XRP holdings on exchanges. According to Glassnode data, exchange-held XRP reserves grew from 3.3 billion on August 27 to 3.94 billion as of September 8, signaling heightened liquidity concerns and lower confidence among investors.

XRPL Network Activity Shows Declining Participation

Alongside price struggles, XRP Ledger’s network activity has suffered a significant slump. On-chain analytics from CryptoQuant highlight a drop in daily active addresses (DAAs), falling from 50,482 on July 18 to roughly 21,000 at present. Similarly, new wallet creation on the XRPL has plummeted, declining from a 2023 peak of 11,000 to just 4,300 new wallets.

These metrics serve as indicators of waning user engagement and network adoption. Decreased activity correlates with reduced transaction volumes, which, in turn, affect liquidity and buying momentum. This stagnation threatens to prolong XRP’s price challenges, raising the risk of further downside.

Future Outlook

The confluence of bearish technical patterns, whale-driven selling, and declining XRPL participation presents significant hurdles for XRP. While reclaiming the $3 level could potentially revitalize market sentiment and spark renewed investor interest, persistent failure to recover key thresholds like the 50-day moving average increases the likelihood of additional declines toward $2.

To counteract these challenges, XRP requires a resurgence of network activity and transaction volumes, as well as stronger market demand. Until these factors improve, the cryptocurrency may remain vulnerable to extended price pressure.