XRP sees $206.6M whale transfer – Could heavy supply cap the recovery?

XRP’s recent rally has been accompanied by an interesting shift in trader derivatives positioning. The altcoin climbed from roughly $1.00 to $1.42, yet traders have steadily reduced their outstanding exposure.

By the end of August, the 30-day Open Interest (OI) in XRP for Bybit had reached around 61 million XRP. Later on, it fell dramatically through the first two weeks of September to -37.5 million XRP. The drop represented a 98.5 million XRP turnaround, while the price gained about 42%.

The divergence suggests XRP’s advance was not as a result of a fresh build-up of leverage but spot-driven accumulation.

While decreased OI does provide evidence that there are fewer trades taking place, it does not clarify if those trades were short or long. Therefore, the data rules out a leverage-fueled rally leaving open whether the reduction was driven primarily by long profit-taking or short squeezes.

XRP holds its August gains

That shift in derivatives exposure comes as XRP’s price remains firmly above its August breakout level. XRP’s price surged from approximately $1.00 to nearly $1.70 in just three days. Since then, XRP has been in an extended consolidation mode.

XRP’s price has traded between approximately $1.30 and $1.49 since late August. Buyers have defended most of the gain. On the last test of resistance, the price for XRP reached approximately $1.418 before trading down to $1.3935.

Although the short-term pullback maintains the overall trading range, it also indicates there are still sellers trading actively on or very near the upper end of the trading range. In addition, RSI stands at 52.03. This leaves the relative momentum trading to be neutral.

A close above $1.49 would signal renewed buying strength and open $1.55. However, if XRP cannot maintain support above $1.30, it could severely diminish its chances of continued improvement.

XRP faces heavy whale supply

XRP’s recovery now faces a supply question as large holders position around key price levels. A wallet moved 145.6 million XRP, worth about $206.6 million. However, both wallets remain unknown, so the move does not confirm selling.

Timing is also important because the altcoin currently is experiencing high amounts of liquidation on the sell side at prices greater than $1.40. On Binance, significant amounts of sell order activity sit near $1.50, while even thicker layers of clustered orders are on Coinbase.

If spot demand is not sufficient, then it could become increasingly difficult to get past these barriers to further advances in the value of XRP.

However, the transfer does not confirm selling unless those coins reach an exchange. For now, XRP needs stronger spot demand to absorb nearby supply. Otherwise, the large transfer and thick sell walls could keep the recovery capped.

Final Summary

• XRP remains in a strong recovery range as price rises while derivative exposure declines, reducing leverage risks.
• Also, it needs to clear $1.49 with stronger spot demand, while $1.30 remains the key support for the recovery.