The outlook for XRP is darkening, with significant sell-offs from its largest holders threatening to undermine recent stability. This activity is creating a stark contrast within the market: while new spot ETFs attract substantial capital, suggesting institutional interest, a wave of selling from so-called “whales” is applying intense downward pressure on the price. The key question for investors is whether this signals a deeper correction or if fears are overblown ahead of upcoming central bank decisions.
Institutional Demand Fails to Offset Whale Exodus
Paradoxically, the institutional side of the market shows robust activity. Since their launch in November, spot XRP ETFs have gathered nearly $700 million in inflows, without recording a single day of net outflows. Canary Capital’s XRPC product, in particular, has outperformed its competitors. However, this steady institutional buying is currently insufficient to fully absorb the selling volume from major holders. Sentiment in the options market further reflects this caution, as professional traders are increasingly taking positions to hedge against potential further declines.
On-Chain Data Reveals Aggressive Distribution
The primary source of current price pressure is not broad market sentiment but visible on-chain behavior. Data reveals a dramatic shift among XRP’s largest investors. These whales have decisively ended their accumulation phase and are now distributing their holdings at a concerning pace.
The holdings of these major entities have plummeted from over 70 billion to approximately 57 billion tokens in a very short period, marking one of the most aggressive sell-offs this year. A clear divergence is at play: while retail investors and ETF buyers provide incoming demand, the “smart money” appears to be using this liquidity to exit positions. This persistent selling pressure makes it difficult for the price to establish a solid foundation.
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Macroeconomic Fears Resurface
Compounding the technical pressure is a renewed macroeconomic concern that haunts investors from August 2024: the potential unwinding of the carry trade. Recent commentary from the Bank of Japan regarding possible interest rate hikes has sent shockwaves through speculative markets. The fear is that traders who borrowed cheap Japanese yen to purchase crypto assets like XRP may be forced to liquidate those positions if financing costs rise.
This anxiety over forced selling has pushed overall market sentiment toward “extreme fear” levels. It also helps explain why XRP has struggled to build sustainable upward momentum despite positive news flow, as the shadow of potential macro-driven liquidations looms.
Technical Support Levels Under Threat
From a chart perspective, the situation is becoming critical. XRP is currently trading near $2.02, battling to maintain its position against a prevailing downtrend. All eyes are on the crucial psychological support level around $1.90. A decisive break below this threshold could trigger an accelerated correction.
The potential for relief may hinge on the U.S. Federal Reserve. Market hopes for an interest rate cut on December 10th could provide a temporary boost to sentiment. Until then, however, XRP remains caught in a tug-of-war between exiting whales and incoming ETF investment, with its near-term direction hanging in the balance.
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