XRP Price Faces Correction Risk as New Investors Pull Out and Selling Pressure Increases
XRP, one of the largest altcoins in the market, has had a strong week, recording a gain of more than 27% and approaching its all-time high (ATH) of $3.66. At the time of writing, XRP is trading around $3.50, reflecting strong market interest amid a recovery in the entire crypto sector.
However, recent signs suggest that XRP’s bullish momentum is waning, with selling pressure mounting and new investors rapidly declining. These factors have raised concerns that XRP may soon enter a price correction phase.
New investor withdrawal dampens bullish momentum
Market data shows that the number of new wallets holding XRP has dropped sharply from 11,058 to 3,930 in just the past 48 hours. This represents a cooling of the wave of participation from new investors, a force that often plays an important role in maintaining short-term bullish momentum. The sudden drop in the number of new investors reflects cautious sentiment, if not concern, about the risk of price reversal after a period of strong growth.
New investors often act on market signals and crowd psychology. When the price approaches or exceeds ATH, it is understandable to take profits or stay on the sidelines. However, if this trend continues, XRP may lose an important source of demand to sustain the next breakout.
Selling Pressure from Long-Term Holders Increases
In addition to the withdrawal of new investors, another worrying factor is the change in behavior from long-term investors. Data from on-chain analytics platforms shows that in the past two days, long-term XRP holders have started to sell off, marking the first time in over a month that selling pressure from this group has increased.
This is a negative signal because long-term investors often play a role in stabilizing prices during volatile periods. When they start to exit their positions, it often reflects skepticism about the potential for further price increases, or simply the choice to take profits after achieving the expected profit level.
Market sentiment can therefore be significantly affected, leading to a chain effect in the investment community. Once the group of loyal investors loses confidence, the possibility of increased selling pressure is inevitable.
Risk of Correction if XRP Fails to Hold Key Support
Currently, XRP is still holding the $3.50 mark, but if it fails to hold the support zone around $3.38, the price could enter a corrective cycle. A break of this support level could push XRP back towards $3.00, an area that has acted as strong resistance in the past.
This scenario would negate much of the recent rally and could trigger a further wave of selling, especially if there is no new buying momentum from the market.
There is still a chance if demand recovers
However, the outlook for XRP is not entirely negative. If the market shows positive signs, such as new capital inflows returning or increased interest from institutional investors, XRP could still hold the $3.38 price zone and even have a chance to challenge the ATH at $3.66 again.
A breakout above this key resistance level would open the door for a rally to the $3.80 region, setting a new all-time high for the coin. In that scenario, concerns about the current correction would be nullified.
Conclusion
While XRP is trading near its record high and has held onto most of its recent gains, market signals suggest that caution is on the rise. The withdrawal of new investors, combined with selling by long-term HODLers, could create correction pressure in the short term.
To sustain the rally and avoid falling into a bear cycle, XRP needs to quickly regain the confidence of both new and old investors. Meanwhile, traders should closely monitor key support zones and market behavior to adjust their investment strategies in time.