XRP Faces Significant Selling Pressure, Drops Below $2 Amid Profit-Taking

Mounting Selling Pressure Pushes XRP Below $2

XRP has entered a significant phase of distribution as the digital asset now trades beneath the psychologically important $2 threshold. This decline represents a steep drop of approximately 50% from its recent cycle peak of around $3.66. The shift in market dynamics highlights a broader trend in investor behavior, where the focus has shifted decisively away from accumulation towards profit-taking and distribution.

Exchange Inflows Signal Intensifying Sell-Off

Recent data indicates a notable increase in XRP transfers to centralized exchanges, particularly Binance, since mid-December. On December 19, exchange inflows surged dramatically, with 116 million XRP tokens deposited—a clear signal that many holders are preparing to liquidate their positions. Such significant inflows to exchanges often foreshadow increased selling activity, as investors transition their assets from private wallets to trading platforms.

This influx represents a convergence of two distinct seller groups: long-term holders cashing in on older investments and newer buyers capitulating under the strain of mounting losses.

Critical Support Levels Under Pressure

Currently, the market has identified the $1.80–$1.85 range as a vital support zone for XRP. Technical analysis indicates that this area represents the last significant demand level before a potential deeper correction. Should this support fail to hold, analysts predict a retracement towards the critical $1.50 level might occur.

Market sentiment has shifted markedly towards fear, with bullish momentum dissipating as each recovery attempt meets renewed selling pressure. The inability to establish consistent support levels has left traders grappling with uncertainty over near-term price stabilization.

Broader Market Context

While Bitcoin and Ethereum have also faced volatility during the recent market correction, XRP's sharp 50% decline underscores a more severe drawdown specific to this asset. This pronounced underperformance suggests that selling pressure in XRP extends beyond general cryptocurrency market dynamics.

Outlook

The current distribution phase signals a significant transition for XRP following its recent rally towards $3.66. The combination of increasing exchange inflows, deteriorating sentiment, and technical weaknesses indicates continued downside risks in the short term. Market participants are closely monitoring the $1.80–$1.85 support zone: a decisive breach below this level could trigger further selling and extended price discovery to the downside.

The upcoming days will be crucial in determining whether demand will emerge at current levels or if XRP will continue facing distribution pressure.

Why It Matters

For Traders

Understanding the current selling pressure and support levels is essential for traders looking to time their entries and exits effectively.

For Investors

Long-term investors should be aware of the current market dynamics and consider the implications of potential further declines for their holdings.

For Builders

Developers in the crypto space should remain vigilant about market sentiment, as it can impact adoption rates and network activity significantly.