Analytical platform CryptoQuant has revealed why the price of XRP has been steadily failing, most recently dipping below the psychological level of $2. The platform noticed this XRP ETF the approval didn’t stop the selling pressure, but instead appears to have intensified it.
Why the XRP price is falling despite the success of the ETF
In CryptoQuant ReportPelinayPA analyst revealed that the XRP price is under significant selling pressure from whales holding between $100,000 and $1 million of XRP and whales holding over 1 million. These XRP Whales They are said to be responsible for most of the revenues for the Binance cryptocurrency exchange.
These transfers indicate that these whales are usually looking to get rid of these coins, which puts selling pressure on the XRP price. PelinayPA noticed that after every major spike in inflows on the chart XRP price it is creating a pattern of lower highs and lower lows, which suggests that supply is currently outweighing demand.
The CryptoQuant report notes that this is because there is no recent, powerful spot buyer in the market. Continuous growth available supply it is also said to continue to depress XRP even though the whales are not dumping aggressively. Meanwhile, PelinayPA highlighted key price levels to pay attention to as prices continue to decline.
The analyst said that based on the intensity of currency inflows and price reactions, the first major support zone is between $1.82 and $1.87. She noted that this range marked where the price briefly stabilized and where miniature buyers emerged. However, XRP is still at risk of falling to the $1.50 and $1.66 range if immense outflows continue. The chart does not indicate that the altcoin is likely to rise any time soon with this kind of selling pressure.
Whales have exploited the ETF narrative
The CryptoQuant report stated that the XRP ETF process was theoretically expected to create institutional demand and drive the price higher through spot purchases. However, this did not happen as there was a lot of volume instead XRP inflows to Binance. PelinayPA explained that the whales were the first to react as expectations for ETF approval rose.
The analyst further revealed that XRP accumulated in advance for the ETF narrative was transferred to exchanges and used as sell-side liquidity. Basically, the whales were selling ETF approval story for retail investors. As a result, the XRP price is under significant selling pressure whenever it approaches the $1.95 level.
PelinayPA reiterated that it would be an unrealistic assumption to expect a bullish move before currency inflows decline. However, it is worth noting that XRP ETFs have been successful so far, accumulating over Net assets of $1 billion in just over a month since their release.
At the time of writing, XRP is trading around $1.90, up almost 4% in the last 24 hours, according to data from CoinMarketCap.
Featured image from Getty Images, chart from Tradingview.com
