XRP Under Pressure: Is Now the Time to Pounce?

XRP faces headwinds as profitability dips. Is this a buying opportunity? We examine market trends, ETF impact, and Ripple’s fundamentals for future insights.

What to Know:

• XRP’s profitability metrics have declined, mirroring levels last seen in late 2024.
• Derivatives activity shows weakening speculative demand, impacting XRP’s price growth.
• Despite short-term weakness, strong fundamentals and institutional interest, including new XRP ETFs, suggest potential for long-term recovery.

XRP is currently experiencing renewed market pressure, with profitability metrics sliding back to levels observed during late November 2024. Data indicates that only 58.5% of XRP’s circulating supply is currently in profit, marking the lowest level in over a year. Even with XRP trading around $2.15, a substantial 41.5% of circulating XRP, or approximately 26.5 billion tokens, are held at a loss.

Analyzing the Pressure on XRP

The current imbalance reflects a concentration of trading volume around elevated price points earlier in the year, leaving recent buyers vulnerable as market momentum wanes. Derivatives activity further underscores this cautious sentiment. Open interest in XRP futures has significantly decreased from nearly $10 billion to around $3.8 billion, which signals a weakening of speculative demand as traders reduce their directional bets.

XRP’s price growth has notably stalled since its post-election spike, trading sideways around $2.10. Moreover, long-term holders who accumulated XRP below $1 are now actively taking profits, with realization activity increasing by 240% since September. This profit-taking is adding to the current downward pressure on XRP’s price.

XRP’s Strong Fundamentals and Future Outlook

Despite the short-term challenges, the underlying fundamentals of XRP and Ripple remain strong. Ripple’s resolution of its dispute with the SEC, coupled with a recent $500 million funding round and strategic acquisitions, are bolstering the company’s product suite and expanding its global presence. These developments are viewed favorably by market analysts, as they contribute to the growth of the ecosystem that relies on the XRP token.

Institutional interest in XRP is also on the rise. Several spot XRP ETFs have launched recently, attracting significant early inflows. This increased accessibility to XRP through regulated investment vehicles suggests a growing acceptance and demand for the digital asset.

Read next: More XRP News

Furthermore, social media sentiment indicates that XRP remains a prominent topic of discussion, with focus on ETF launches and its positioning relative to other major cryptocurrencies. Additionally, recent retail sales may signal an imminent price rebound, as historically, retail capitulation often precedes market recoveries.

In conclusion, while XRP is currently facing pressure due to profit-taking and decreased speculative interest, its strong fundamentals, increasing institutional adoption, and potential for a retail-driven rebound suggest a positive long-term outlook. Investors should carefully monitor these factors to make informed decisions.

Related: XRP Price: $12M Max Pain for Bears

Source: Original article