XRP investors realized profits of over $5.86 billion during the week. XRP whales are slightly more accumulative despite maintaining an average return of nearly 400%. XRP needs to break out of the $2.92 level for it to rise towards all-time highs.
Ripple’s XRP rose 7% on Friday as whales held on to the token despite heavy profit-taking among retail traders. This attitude from the whales could drive XRP to an all-time high of $3.57.
XRP on-chain data shows bullish sentiment despite record profit taking
XRP extended its gains, rising to a four-year high of $2.91 on Tuesday before reversing, dropping about 17% over the next three days.
This decline may have been caused by increased profit-taking, as revealed by the XRP Network Realized P&L Index, with investors posting more than $5.86 billion in profits since December 1st. is shown. Such profit-taking is normal among investors in bull markets, especially when prices reach new highs.
Realized P&L of XRP Network | Santiment
This is evidenced by the XRP Average Coin Age indicator, which shows an increase in weekly selling activity across all coin ages, especially in the 2-3 year cohort. If we see a decrease in this metric, it means the distribution among the respective coin age cohorts.
Average coin age of XRP | Santiment
Despite the recent pullback from profit-taking, other XRP on-chain data shows that bullish sentiment still prevails in the market.
The XRP Market Value to Realized Value (MVRV) ratio, which measures the average profit or loss of all holders, shows that investors still retain more than 388% of the profits.
In particular, most of the recent sales activity may have come from retailers, as whales have shown some bias in accumulation. This can be seen in the graph below, which shows that investors holding between 1 million and 10 million XRP have stashed 260 million XRP tokens during the week.
XRP Supply Distribution (1 Million – 10 Million) and MVRV Ratio | Santiment
Additionally, whale activity (trades over $1 million) this week reached its highest level in five years, according to Santimento data.
XRP whale transactions (>$1 million) | Santiment
However, the consumption age index, which measures the movement of previously unused/old coins multiplied by their volume, remained low and whale holdings did not decline.
This indicates that most of the whale activity that week was potentially accumulation-oriented. Whales still holding onto the tokens during a bull market suggests that they believe there is room for the price to rise further.
XRP consumption period | Santiment
However, it is important to note that there are also a large number of new XRP whales who purchased tokens after the US presidential election. This cohort is likely to panic sell if XRP falls near its cost base.
Additionally, XRP's weekly active addresses continued to increase, reaching a 16-month high of 495,000.
Meanwhile, Ripple Research Chief Technology Officer David Schwartz said at the Emergence conference on Friday that he expects the company to launch the RLUSD stablecoin by the end of the year. Members of the crypto community had expected a launch on Wednesday, but Ripple debunked rumors that it could launch this week.
XRP needs to break through the $2.92 level before rallying towards all-time highs
XRP briefly fell below the 23.6% Fibonacci (Fib) retracement level during the week before recovering there. If XRP is able to regain the $2.58 level, a rejection could result in a retest of $2.92.
XRP/USDT weekly chart
Above this level, XRP could rise above its all-time high of $3.4, set a new record of $3.57, and reach its multi-year round bottom maximum profit target.
The Relative Strength Index (RSI) is in overbought territory, indicating that prices are overheating and a correction may be imminent. The stochastic oscillator is in overbought territory but is trending down, indicating that the bullish momentum is weakening.
If the weekly candlestick closes below the $1.96 level near the 50% Fib retracement, the bullish theory will be invalidated and XRP will be sent to find support near the 61.8% Fib level.
