Market Meltdown: The Hilarious Drama of XRP’s Price Struggles

by

Ah, the price of XRP-a veritable soap opera in the grand theatre of finance! Like a wayward thespian, it attempts to find its footing after a rather theatrical market-wide sell-off. It pirouetted dramatically downwards, flirting with the $1.50 mark, only to engage in a cheeky rebound towards $1.61, mimicking the broader market’s waltz between January 31 and February 1. At first glance, this appears to be a technical bounce, perhaps the overture to a more elaborate performance.

However, dear reader, the on-chain and flow data dance a different tune, suggesting that this recovery is as fragile as a soap bubble. The patrons supporting XRP at this moment are not your steadfast investors but rather a gaggle of short-term traders-those flighty butterflies of the market. Three indicators elucidate why this rebirth could quickly transform into a tragic farce.

Short-Term Holders Are Leading the Bounce – And That’s a Risk

The XRP price is still trapped within a long-term falling channel reminiscent of a tragic love story, active since early July.

This recent bounce occurred near the lower boundary of this channel, around the melancholic $1.50. That level attracted buyers, like moths to a flame. But let us ponder-who bought matters more than where the price found solace.

Craving more insights akin to this? Subscribe to Editor Harsh Notariya’s Daily Crypto Newsletter-an exquisite read!

This is where our HODL Waves-a most curious metric-come into play, tracking how long our investors have held their coins, revealing which factions are ascending or descending in their commitment.

Recent revelations disclose that the 1-week-to-1-month cohort, those ever-so-ephemeral short-term traders, orchestrated the majority of the buying. Their share of XRP supply catapulted from a mere 1.99% to a staggering 5.27% in a mere two-day span. A veritable explosion of speculative ownership!

History, that stern teacher, has shown us the perils of such folly. When XRP reached its zenith of $2.35 on January 5, this same group held a paltry 4.83% of the supply. As the price wavered, they hastily reduced their holdings to a meager 2.15%. Such panic-prompted selling sent the XRP price spiraling down toward $1.65 in subsequent weeks.

In layman’s terms, these traders are akin to children in a candy store-quick to buy dips but even quicker to flee at the slightest hint of uncertainty.

Now, they are once again at the helm of this rebound. Alas, current support is built upon fast-moving capital, lacking the foundation of long-term conviction. Should the XRP price falter near resistance, this capricious group may very well dash for the exits, triggering yet another wave of melancholy.

Exchange Outflows Are Falling as Broader Buying Weakens

The second ominous note comes from the exchange flow data-our financial symphony’s discordant chord.

Exchange outflows, those telltale signs of coins leaving the trading platforms, usually herald the arrival of new buyers or long-term holders. Conversely, inflows signal an exodus, a veritable stampede away from the party. Strong recoveries often find their strength in rising outflows during pullbacks, indicating fresh demand entering the scene.

Yet, dear reader, XRP exhibits the opposite trend.

On January 31, exchange outflows were at a robust 31.38 million XRP. By early February, they had plummeted to a pitiful 9.81 million-a decline of nearly 70%! This occurred whilst XRP succumbed to a 14% fall from its late-January highs.

Instead of rallying during the dip, buying pressure has weakened-what a curious turn of events!

This phenomenon signifies that only a narrow coterie of traders supports the price-those speculative butterflies again! Broader market participants show no inclination to increase exposure. Thus, should these short-term holders decide to sell, there exists a lamentably limited demand to absorb their whims.

Such a structure is as delicate as a house of cards. The price may linger temporarily, but it lacks depth. Without stronger outflows, any rebounds are destined to fade into obscurity.

Weak Conviction Buyers and Key Price Levels Keep XRP Vulnerable

The final act of this tragicomedy emerges from the absence of long-term and “conviction” investors-those noble souls who weather the storms.

The HODL Waves reveal that the longer-term groups, particularly the illustrious 2-year to 3-year cohort, have not graced us with their presence. Once, they commanded over 14% of the supply in late 2025; now, they languish at a mere 5.7%, remaining static. No purchases, even amidst the aggressive price dips.

These stalwart holders typically seize opportunities during major downturns. Their conspicuous absence suggests that the market has yet to find the current levels enticing for long-term investment. This lack of conviction aligns unsettlingly with the price structure.

Several key levels now dictate XRP’s fate.

On the upside, $1.69 serves as the first formidable barrier. Reclaiming it would signal a flicker of improving confidence. Beyond that, $1.96 becomes critical-sustained movement above this threshold could challenge the falling channel and shift the trend towards neutrality.

Conversely, the vital support zone lingers between $1.47 and $1.50. Should these levels crumble, we face the grim specter of a downward journey towards $1.25, confirming a channel breakdown and implying a disheartening further decline to as low as $0.93. As long as XRP flits between $1.47 and $1.69, uncertainty reigns supreme.

While the recent bounce may suggest that selling pressure has paused momentarily, the weak exchange flows, fragmented holder behavior, and absence of conviction buyers stifle any genuine upside potential.

At present, the traders propping up the XRP price are those same characters who have historically sold early. Unless broader demand and the return of long-term participants materialize, this support may very well set the stage for the next, more dramatic sell-off.

Read More

2026-02-03 02:51