XRP has maintained a downtrend since reaching an all-time high of $3.40 on January 16. It currently trades at $2.18, noting a 35% price drop over the past two months.
The double-digit dip has led to a decrease in the amount of XRP tokens held in profit. On-chain data shows that the bearish sentiment against the altcoin is climbing, hinting at an extended decline.
XRP Sees Drop in New Demand, Signaling Market Interest Slowdown
As XRP’s price falls, its total supply in profit has also reduced. According to Santiment, this has shrunk by 6.39 billion over the past week to fall to its year-to-date low.
As of this writing, 87.95 billion tokens out of a total supply of 99.98 billion are held at a profit. This signals that some investors are now holding XRP at a loss, reflecting increased selling pressure and weakening market sentiment.
Moreover, on-chain data also shows a slump in new demand, with daily fresh purchases of XRP seeing a notable drop this month. Per Santiment, only 4,516 new wallet addresses were created on Sunday to trade XRP.
This represented 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. It signals waning market interest in the altcoin and can contribute to further price declines if selling pressure remains high.
XRP Faces Selling Pressure: Will Bulls Break the Downtrend?
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. It suggests that sellers are in control, and 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. In that scenario, XRP’s value could drop below $2 to $1.47.
However, if buying pressure gains momentum, XRP could break above its descending trendline and climb to $2.93.
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