XRP Price Dips as Profit-Taking Rises Post-Surge

XRP, also known as Ripple, has experienced a slight dip in price, currently sitting at around $2.47. This comes after a significant 13% surge last week. On-chain data indicates that holders of XRP are starting to pocket their profits after a big rally, leading to increased selling pressure and a potential short-term pullback in the coming days.

It’s not uncommon for investors to take some profits off the table after such a rapid increase in price. In fact, XRP’s price has skyrocketed more than four times from early November to early December. Santiment’s Network Realized Profit/Loss (NPL) indicator highlights that holders are indeed cashing in on their gains. This metric spiked on December 1, signaling that on average, holders are selling their XRP at a substantial profit. A similar pattern was observed on May 1, 2021, resulting in a correction of over 35% in the following two weeks. If history repeats itself, XRP could face a similar drop in the short term.

According to Coinglass’s data, XRP’s long-to-short ratio is currently at 0.85, the lowest in a month. This ratio reflects a bearish sentiment in the market, suggesting that more traders are anticipating a price decline for XRP. This hints that Ripple’s price might experience a pullback soon.

Looking at the charts, XRP is facing resistance at the $2.66 level. As of now, it’s trading slightly lower at $2.47. If the resistance at $2.66 persists, XRP could continue its decline and retest the significant $2.00 level. The Relative Strength Index (RSI) on the daily chart is at 70, hovering around the overbought threshold of 70 and trending downwards, signaling a weakening bullish momentum. A break below the overbought territory could be a clear sell signal for a pullback.

On the other hand, if XRP manages to break above $2.66 and closes above $3, it could extend its rally and potentially retest its all-time high of $3.40, recorded on January 7, 2018. Keep an eye on these key levels to gauge the future movement of XRP in the coming days.