XRP at a crossroads: Rising activity meets the looming $1.50 supply wall

The decline in Ripple’s [XRP] exchange reserves from last year appears to have bottomed out. It has stabilized around 2.75 billion tokens, as the price hovered around $1.40 in April.

AMBCrypto reported that this represented easing selling pressure.

The decrease in big whale activity and a shift toward normal activity also suggested that aggressive accumulation has stalled.

The market was likely to be influenced by retail participants, and an uptick in spot ETF flows could also positively impact XRP price trends, as they did in mid-April.

In trying to determine whether accumulation or selling pressure had the upper hand, some on-chain metrics seemed to give contrasting signals.

XRP: Sellers still have the upper hand

In a post on CryptoQuant Insights, analyst Arab Chain drew attention to the rising XRP network activity. The activity had been in a downtrend until mid-April, when it took a sharp U-turn and has steadily climbed higher over the past three weeks.

In late March and the first half of April, XRP prices trended from $1.45 to $1.30 and stayed there for nearly two weeks. During this time, the 30-day sum of withdrawal transactions outnumbered the deposit transactions.

This withdrawal-heavy transaction trend continued into May, but in recent days, the deposit transactions have taken a slight edge.

This meant that even as transaction counts increased, withdrawals slowed down, which indicated potential sell pressure.

The exchange net position change also measures the 30-day change in the supply held in wallet addresses. A positive supply change indicates more token flow into exchanges than out, which in turn points to increased potential selling pressure.

In the six days since Thursday, the 30th of April, XRP has rallied 4.25% to reach $1.42.

On the 17th of April, the altcoin momentarily reached a local high of $1.51. Since February, the $1.5-$1.6 area has acted as a supply zone. The temporary XRP foray into this resistance zone was accompanied by a sharp spike in Coin Days Destroyed and a retracement to $1.36.

At the time of writing, the CDD metric remained low, meaning the wave of selling has not yet begun.

Though exchange reserves were stable, the positive net position change and slightly higher deposit transactions, combined with the $1.5 supply zone, meant XRP could see another wave of selling in the short term.

Final Summary

• XRP exchange reserves have stabilized in recent months.
• The current approach of the overhead supply zone, combined with potential sell pressure in the short term, meant XRP would have a tough time maintaining its momentum.