XRP Slips 9% From All-Time High as Profit-Taking Strengthens

XRP has dropped 9% in value since hitting its all-time high of $3.41 on January 16, driven by a steady increase in sell-offs that have weighed on its price.

With profit-taking on the rise, XRP is likely to experience continued downward momentum in the near term.

XRP Traders Lock in Profit, Puts Pressure on Price

On-chain readings from XRP’s Network Realized Profit/Loss (NPL) confirm the surge in profit-taking activity. According to Santiment, this metric has persistently returned positive values over the past week, indicating that XRP holders have been selling their tokens for profit. 

A coin’s NPL measures the difference between the price at which the asset was last moved or sold and the current market price. It tells us how much profit or loss is “realized” by its holders.

When an asset’s NPL is positive, more investors are selling at a gain than at a loss.  This selling activity often leads to increased supply in the market, which may cause the asset’s price to fall if demand does not match the sell-off.

XRP NPL. Source: Santiment

Furthermore, XRP’s surging Exchange Flow Balance confirms the rise in token selloffs over the past week. Per Santiment, this has risen by 105% since January 17, a day after XRP rallied to a new all-time high.

An asset’s Exchange Flow Balance metric tracks the net movement of the asset into and out of exchanges, helping to gauge overall market sentiment. When the metric spikes like this, it indicates an increase in deposits. This often suggests that traders are preparing to sell, putting downward pressure on the asset’s price.

XRP Exchange Flow Balance. Source: Santiment

XRP Price Prediction: Will Profit-Taking Push It Toward $2.45?

At press time, XRP trades at $3.09. If selloffs persist, the value of the third largest crypto asset could plummet toward $2.45, where strong support lies.

XRP Price Analysis. Source: TradingView

On the other hand, if investors reduce profit-taking, XRP’s price could rebound and attempt to reclaim its all-time high.