XRP is currently in a consolidation phase below the $2 support level amid a broader altcoin market downturn, with exchange outflows signaling accumulation despite declining on-chain activity. This bearish structure may precede a breakout if network usage rebounds, potentially targeting higher levels based on historical patterns.
XRP has lost the $2 floor twice since October, forming a bearish market structure that echoes past consolidation periods leading to upside moves.
Over $1.3 billion in XRP has exited exchanges in the last month, reducing reserves and indicating investor accumulation.
On-chain fees have dropped 89% to 650 XRP per day, while XRPL TVL stands at $70 million, highlighting weakened organic demand.
Discover XRP’s current consolidation and potential for recovery amid altcoin weakness. Analyze price action, on-chain metrics, and ETF inflows for informed insights on XRP’s next move.
What is happening with XRP’s price in the current altcoin market?
XRP is navigating a challenging period in the altcoin market, where the Altcoin Season Index has retreated to mid-July levels, reflecting diminished enthusiasm for high-risk assets. Since the October washout, XRP has repeatedly tested and failed to hold the $2 support, resulting in a bearish chart structure that prioritizes major levels for any recovery. Historical precedents suggest that such prolonged sideways action often sets the stage for accumulation and eventual breakouts, as seen earlier this year when XRP consolidated through Q1 and Q2 before surging to $3.60 in late June.
The altcoin market is still hunting for a bottom.
With the Altcoin Season Index dropping back to mid-July territory, investor appetite for “high-risk, high-reward” plays is clearly fading.
In this kind of tape, holding major support levels becomes crucial for high-beta names.
XRP is feeling that pressure too. Since the October washout, it has lost the $2 floor twice, failing to reclaim the key levels needed for a clean V-shaped recovery. In short, the chart shows a bearish market structure.
Source: TradingView (XRP/USDT)
That said, this kind of structure has historically preceded accumulation.
Case in point: Earlier this year, XRP spent Q1 and Q2 chopping sideways before a late-June breakout triggered a parabolic move to its multi-year high at $3.60, showing how prolonged consolidation can fuel strong upside.
A similar pattern seems to be forming now.
Over the past month, $1.3 billion in XRP has left exchanges, with reserves dropping from $7.03 billion to $5.70 billion.
Against this backdrop, could Ripple’s ongoing sideways chop be setting the stage for the next big move?
How are ETF inflows and on-chain metrics influencing XRP’s consolidation?
Recent developments in the XRP ecosystem reveal a mixed picture, with institutional interest providing a counterbalance to softening fundamentals. Q4 began with heightened buzz around Ripple-related exchange-traded funds (ETFs), where clients have acquired $8.73 million in XRP, elevating total ETF-held net assets to $945.49 million. This inflow structurally bolsters XRP during its current range-bound phase, as noted by market analysts tracking institutional adoption trends.
However, on-chain data paints a contrasting view of subdued activity. Total fees paid per day on the XRP Ledger (XRPL) have plummeted 89% from 5.9k XRP in early February to just 650 XRP, reaching lows unseen since December 2020. This decline underscores reduced network utilization and organic demand, with XRPL’s total value locked (TVL) contracting to $70 million, indicating tighter liquidity.
Experts from platforms like Glassnode emphasize that while exchange outflows of $1.3 billion signal accumulation by long-term holders, the divergence between strong demand signals and weak fundamentals could prolong XRP’s consolidation. “Institutional flows offer a safety net, but sustained recovery hinges on revitalized on-chain engagement,” observes a senior blockchain analyst. Supporting statistics from on-chain monitoring services confirm that daily active addresses have also trended downward, aligning with broader altcoin market caution.
Strong XRP demand meets weak fundamentals
Q4 kicked off with Ripple ETF buzz, and the momentum is starting to show.
So far, ETF clients have snapped up $8.73 million worth of XRP, bringing total ETF-held net assets to $945.49 million.
Structurally, this adds another layer of support to XRP as it navigates its current consolidation phase.
That said, on-chain activity tells a different story. The Total Fees Paid per Day on XRP have fallen from 5.9k/day in early February to just 650 XRP/day, marking an 89% drop to levels not seen since December 2020.
Source: Glassnode
Put simply, the gap between fundamentals and market activity is widening.
While institutional flows are providing support, declining on-chain activity implies muted organic demand.
Backing this, XRPL’s TVL has dropped to $70 million, showing that on-chain liquidity on the network is tightening.
Taken together, these factors suggest that XRP’s recent accumulation is more speculative than fundamentally driven.
As a result, weak on-chain activity on XRPL could keep it range-bound until network usage rebounds.
In the broader context, XRP’s performance mirrors the altcoin sector’s struggle to find footing. Data from market trackers indicate that while Bitcoin dominance remains elevated, altcoins like XRP are under pressure to demonstrate utility. Ripple’s ongoing legal clarity post-SEC resolution continues to underpin long-term confidence, but short-term traders are fixated on technical levels. The $2 support, if reclaimed, could catalyze a move toward $2.50, where previous resistance aligns with moving averages. Conversely, a breakdown below $1.80 might extend the bearish bias.
Accumulation patterns, evidenced by the $1.3 billion exchange outflow, align with behaviors observed in prior cycles. During the 2021 bull run, similar reserve drawdowns preceded sharp rallies. Current metrics from sources like Santiment show whale accumulation persisting, with addresses holding over 1 million XRP increasing by 2% in the past quarter. This suggests savvy investors are positioning for volatility, potentially amplified by macroeconomic factors such as interest rate expectations.
Frequently Asked Questions
Why is XRP experiencing prolonged consolidation in the altcoin market downturn?
XRP’s consolidation stems from repeated failures to hold $2 support amid fading altcoin appetite, as the Altcoin Season Index signals low risk tolerance. Exchange outflows of $1.3 billion indicate accumulation, but declining on-chain fees and TVL reflect weak fundamentals, keeping price range-bound until broader market recovery.
What role do Ripple ETFs play in XRP’s current price stability?
Ripple ETFs have bolstered XRP by adding $8.73 million in recent inflows, pushing net assets to $945.49 million and providing institutional support during consolidation. This structural demand helps mitigate downside risks, though it contrasts with falling on-chain activity, suggesting ETF momentum could drive stability if network usage improves.
Key Takeaways
- XRP’s bearish structure below $2: Despite losses since October, historical consolidation has led to breakouts, with $1.3 billion in outflows pointing to accumulation.
- Institutional support via ETFs: Inflows of $8.73 million enhance stability, countering weak on-chain metrics like 89% fee drops and $70 million TVL.
- Path to recovery: Monitor on-chain rebound for upside; failure at key supports may extend range-bound trading in the altcoin downturn.
Conclusion
In summary, XRP’s consolidation phase amid altcoin weakness highlights a bearish chart structure tempered by ETF inflows and exchange outflows, though declining on-chain activity like fees and TVL signals underlying challenges. As institutional demand provides a foundation, a rebound in network usage could trigger the next significant move, echoing past patterns. Investors should track support levels closely for opportunities in this evolving landscape.