XRP Drops 35% in Two Months as Bearish Sentiment Grows

XRP, a prominent cryptocurrency, has experienced a significant downturn since reaching its all-time high of $3.40 on January 16. Currently trading at $2.18, the token has seen a 35% price decline over the past two months. This downward trend has led to a decrease in the amount of XRP tokens held in profit, with on-chain data indicating a growing bearish sentiment against the altcoin. This suggests that the decline may continue.

As the price of XRP has fallen, so has its total supply in profit. According to Santiment, this supply has shrunk by 6.39 billion over the past week, reaching its year-to-date low. Currently, 87.95 billion tokens out of a total supply of 99.98 billion are held at a profit. This indicates that some investors are now holding XRP at a loss, reflecting increased selling pressure and weakening market sentiment.

Additionally, on-chain data shows a slump in new demand for XRP, with daily fresh purchases seeing a notable drop this month. Only 4,516 new wallet addresses were created on Sunday to trade XRP, representing the lowest daily count of new XRP demand since the beginning of the year. When an asset sees a drop in new demand, it means fewer investors are buying it. As observed with XRP, this has reduced trading activity and weakened price support in its spot market, signaling waning market interest in the altcoin and potentially contributing to further price declines if selling pressure remains high.

On the daily chart, XRP has traded below a descending trend line since reaching its all-time high, reflecting the downward trend. This bearish pattern is formed when an asset’s price consistently creates lower highs over time, suggesting that sellers are in control. Unless the price breaks above the trend line, further declines are likely. XRP trades at $2.17 at press time, significantly below this descending trendline. With a growing bearish bias, the token’s price might fall further from this trendline, potentially dropping below $2 to $1.47. However, if buying pressure gains momentum, XRP could break above its descending trendline and climb to $2.93.