After falling nearly 20% from its yearly high of $2.9, XRP pundits are saying the coin is poised for another significant rally. Within this week, the Ripple-backed coin experienced heightened selling pressure triggered by short-term traders offloading their holdings to cash in on already accumulated profit.
Recall that XRP skyrocketed by 400% in less than a month after Gary Gensler, the current SEC chairman, announced that he would step down from office in January 2025. However, the coin failed to sustain this momentum even after a new pro-crypto SEC chairman was announced. With the recent decline, investors are now asking if this is the right time to buy XRP.
Crypto Exchanges Records $315 Million XRP Outflow
On-chain data suggests a significant amount of XRP leaving crypto exchanges. Precisely, Coinglass spot XRP inflow/outflow analytics shows that about $315 million worth of XRP was spotted moving from exchanges to external wallets.
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When a significant amount of assets flows from centralized exchanges to external wallets, it signifies bullish patterns, indicating increasing buying opportunity and a reduction in selling pressure. These transactions often result in upside movement for the underlying asset in the next few days.
Conversely, when a large amount of coins flow into exchanges, it is often interpreted as a sell-off. Notably, the last time such an amount was recorded moving to exchanges, XRP’s price declined by almost 20%. Now imagine this going in the opposite direction, XRP might witness an upscale in the coming days.
Source: Coinglass
What Does the Technical Analysis Say?
Meanwhile, XRP’s analysis signifies a possible upside to its yearly high. Recently, XRP broke out of a visible downtrend but is facing strong resistance at $2.4 which is preventing it from rallying. If the XRP price can close above this resistance, we might see a possible 20% surge toward the $3 mark.
Technical analysis along with significant whale transactions suggests that bulls are now controlling the asset, which may help XRP maintain its upward momentum and hit a new high in the days ahead.
XRP Price Movement
XRP has mostly traded in red in the last 24 hours. At the time of writing, the coin was down marginally by 0.5%, trading at $2.33. The chart below signifies XRP closing the gap after dropping as low as $2.2 earlier today.
Source: CoinMarketCap
Additionally, XRP’s one-day trading volume plummeted by 47.18% to $13.70 billion within the same time. In terms of market valuation, XRP now occupies the #4 position in the market, behind Bitcoin (BTC), Ethereum (ETH), and USDT, with a live market cap of4133.2 billion.
Should You Buy XRP?
Based on the above technical and transactional analysis, it is easy to maintain a bullish stand on the trajectory of XRP. On top of that, several factors including the upcoming launch of the Ripple RLUSD stablecoin may influence its movement in the coming days.
If you are a long-term XRP holder, then it is advisable to continue holding your coin to see how much further it can grow. However, if you are a new investor, buying a cryptocurrency during a decline is often the right way to go. Always remember, though, that cryptocurrency investment is highly speculative, the market is very volatile and no one knows for sure when and how a rally or a decline will happen. It is important to do due diligence and consult with an expert before making any investment decision.
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Victor Swaezy
Victor Swaezy is a crypto-journalist with more than 3 years of experience in covering blockchain technology and digital currencies news. Known for his comprehensive reporting, Victor has contributed to leading industry publications such as Coinfomania and Crypto News Guru, providing market participants with the required knowledge to make informed decisions. When he is not working, he loves to watch movies and have a good time.