XRP May Face More Downside from Derivatives Pressure and Insider Sales

• XRP bearish trend driven by derivatives: Taker buy volume on Binance fell 95.7% to $252 million, coinciding with price downtrend.

• Insider selling by Ripple co-founder Chris Larsen added over 200 million XRP to the market, weighing on sentiment.

• Accumulation/distribution indicator shows net selling at -2.5 billion XRP, with potential support at $1.50 if trends continue.

XRP bearish trend intensifies with derivatives selling and insider dumps pushing price to $1.89, down 50% from highs. Spot accumulation offers some hope, but discover key factors and future outlook now.

What is causing the current XRP bearish trend?

XRP bearish trend stems primarily from sustained selling pressure in the derivatives market and notable insider distributions. On exchanges like Binance, taker buy volume has plummeted by 95.7% over the past month, dropping from $5.8 billion to just $252 million, according to data from CryptoQuant. This shift reflects weakening buyer aggression amid a broader rotation of capital from altcoins to Bitcoin, exacerbating the price decline to around $1.89.

How has derivatives market activity influenced XRP’s price?

The derivatives market has played a pivotal role in the XRP bearish trend, with falling volumes and a skewed taker buy/sell ratio underscoring seller dominance. CryptoQuant data indicates that taker buy volume on Binance, which holds a significant global market share, collapsed dramatically, aligning closely with XRP’s steady price downtrend. Analyst Darkfrost from CryptoQuant attributes this to a major liquidation event on October 10th and investor shifts toward Bitcoin, reducing altcoin momentum. At press time, the taker buy/sell ratio hovered near 0.883, showing sell orders outpacing buys and fueling bearish sentiment. Such positioning suggests that without a reversal in trader behavior, further downside remains likely, potentially testing lower support levels.

Ripple’s XRP has faced mounting challenges in recent weeks, diverging from its earlier bullish alignment with Bitcoin. Starting the year strong, the altcoin has now declined sharply, losing nearly 50% from its peak and stabilizing near $1.89. This downturn highlights a complex interplay of market forces, where short-term pressures overshadow long-term accumulation efforts.

The pressure is most pronounced in derivatives trading, where global activity provides a clear barometer of sentiment. Binance’s data, as analyzed by CryptoQuant, reveals a stark reduction in buying activity. Specifically, taker buy volume decreased from approximately $5.8 billion to $252 million—a 95.7% drop—over the last month. This decline mirrors XRP’s price trajectory, indicating that buyers are retreating as sellers maintain control.

Source: CryptoQuant

This erosion of buying power has been compounded by historical events, such as the October 10th liquidation cascade, which amplified volatility. Despite these headwinds, the broader cryptocurrency landscape shows Bitcoin gaining favor, drawing capital away from assets like XRP and intensifying the bearish wave.

Insider distribution weighed on sentiment

Beyond derivatives, internal factors within Ripple have also contributed to the XRP bearish trend. Co-founder Chris Larsen’s recent activities have drawn scrutiny, as his sales have flooded the market with supply. In the past week alone, tracking from analyst Ja Martun revealed a significant distribution phase, where Larsen offloaded over 200 million XRP during a ten-day period near local price highs in July. This move, as Martun noted, positioned retail buyers as potential exit liquidity, further dampening confidence.

Source: CryptoQuant

Martun observed, “Still buying? You’re the exit liquidity. He’s dumping on you.” Such distributions not only increase circulating supply but also signal potential caution from key stakeholders, impacting overall market psychology.

Contrasting this, spot market participants have shown resilience. Recent inflows indicate spot investors added about $11 million in XRP in a single purchase, with net inflows totaling $2.51 billion since early September. Weekly data from that period confirms steady accumulation, suggesting a underlying bullish stance among long-term holders.

Accumulation weakens

However, to assess the true strength of this accumulation amid the XRP bearish trend, indicators like the accumulation/distribution (A/D) line provide deeper insights. Currently in negative territory, the A/D reading stands at approximately -2.5 billion XRP, as per TradingView analysis, reflecting that selling volumes continue to surpass buying efforts. This persistent downward trajectory in the indicator points to fragile support, where net distribution could propel prices lower if unchecked.

Source: TradingView

Market observers note that while spot accumulation provides a buffer, the dominance of derivatives selling and insider actions creates a challenging environment. The A/D line’s continued decline could signal additional pressure, with $1.50 as a critical support threshold. Monitoring these metrics remains essential for gauging potential reversals in the XRP bearish trend.

In summary, XRP’s performance reflects a market divided between committed spot buyers and aggressive sellers in derivatives and from insiders. Data from sources like CryptoQuant and TradingView underscore the need for caution, as current indicators favor bears in the short term.

Frequently Asked Questions

What factors are contributing to the XRP price decline in the derivatives market?

The XRP price decline in derivatives is driven by a 95.7% drop in taker buy volume on Binance to $252 million, per CryptoQuant data, alongside a taker buy/sell ratio of 0.883 favoring sellers. This follows a major liquidation on October 10th and capital shifts to Bitcoin, reducing altcoin buying pressure over the past month.

Is spot accumulation helping counter the XRP bearish trend?

Spot accumulation has provided some counterbalance to the XRP bearish trend, with net inflows reaching $2.51 billion since early September and a recent $11 million purchase. However, the accumulation/distribution indicator remains negative at -2.5 billion XRP, indicating that selling overall still dominates and limits price recovery efforts.

Key Takeaways

• XRP bearish trend overview: Derivatives selling and insider distributions have led to a 50% price drop to $1.89, with taker buy volume collapsing 95.7%.
• Spot vs. derivatives contrast: While spot inflows total $2.51 billion recently, the A/D indicator at -2.5 billion XRP shows net selling pressure persisting.
• Future monitoring: Watch $1.50 support; a reversal in derivatives sentiment could signal recovery, but current data suggests caution for investors.

Conclusion

The XRP bearish trend illustrates how derivatives selling and insider activities like Chris Larsen’s distributions can overshadow spot accumulation efforts, pushing prices down amid broader market rotations. As indicators from CryptoQuant and TradingView highlight ongoing net distribution, investors should stay vigilant for shifts in trader behavior. With potential support at $1.50, monitoring these dynamics will be key to navigating future opportunities in the evolving cryptocurrency landscape.