XRP has experienced a significant rally, emerging as one of the top performers among major cryptocurrencies this cycle. Currently trading above $2, which is more than three times its price prior to the rally in October 2024, XRP has generated remarkable returns for early investors who purchased it below 60 cents, enjoying gains of over 300%. However, this surge has prompted many of these investors to take profits, contributing to heightened selling pressure.
Recent on-chain data from Glassnode indicates that the seven-day simple moving average of realized profits from XRP wallets reached $68.8 million earlier this month, marking the highest figures in over a year. This surge in profit-taking is a clear indicator of distribution, as early holders look to cash out amid resistance near the 2021 peak.
The strong profit-taking may explain XRP’s challenges in surpassing the $2.20 mark in recent weeks, despite several bullish developments and favorable technical factors. Currently, while the overall outlook for XRP remains optimistic, supported by regulatory clarity in the U.S. and Ripple’s advancements in tokenized asset infrastructure, there is a significant supply overhang stemming from long-term investors.
Additionally, a recent analysis by CryptoQuant highlights a concerning trend in the broader altcoin market. The cumulative buy/sell volume difference for altcoins, excluding Bitcoin and Ethereum, is at a negative $36 billion. This represents a sharp decline from December 2024, when the metric was briefly positive, signaling a local top for altcoins. Since that period, according to CryptoQuant independent analyst Burak Kesmeci, the market has faced a significant downturn, indicating that many altcoin investors have withdrawn from the market.
While XRP, along with some other tokens like SOL, continues to show strength, the general altcoin ecosystem remains in a bear market. For any hopes of an “altseason” to materialize, investor risk appetite must return and capital flows need to revive within Layer 1s, DeFi, and gaming sectors.
As the cryptocurrency market evolves, investors are encouraged to stay informed and consider market conditions before making decisions.