XRP (XRP) Whales Take Profits as the Price Retests Key Support Levels

XRP price has pulled back significantly since hitting a three-year high of $1.26 amid anticipation of a favorable regulatory environment for cryptocurrencies.

XRP price soared past the $1 mark on Nov. 16, hitting a three-year high of $1.26 amid anticipation of a favorable regulatory environment for cryptocurrencies and the potential resolution of Ripple’s long-standing legal battle with the US Securities and Exchange Commission (SEC).

Related: Ripple Labs and CEO come under fire amid rumors of a Trump meeting

However, XRP price has pulled back significantly since then, leading to questions about whether $1.26 was the top, at least for now.

A closer look at on-chain data and market derivatives could provide some insights into this recent price action and traders’ positioning in the XRP market.

XRP whales take profits, retail sells into rallies

XRP’s pullback on Nov. 17 coincided with substantial inflows, to the tune of tens of millions of dollars, into Bitstamp and other exchanges, according to data from Whale Alert.

For instance, a whale transferred 10 million XRP tokens, worth $11.3 million at the time, to the Bitstamp crypto exchange. This transfer could be part of the investor's intention to cash in on their gains following XRP's big rally.

The timing of these substantial XRP transfers to exchanges is noteworthy, as it aligns with a critical shift in the distribution of XRP holdings.

Specifically, there is a substantial increase in the XRP supply on exchanges, as evidenced by data from CryptoQuant. The chart below shows that the exchanges’ XRP balance increased by 3% between Nov. 6 and Nov. 16.

Note that XRP reserves on exchanges increased by 44 million XRP between Nov. 13 and Nov. 16. This accompanies a 56% price growth over the same timeframe.

XRP reserve on exchanges. Source: CryptoQuant

This suggests possible whale profit-booking to drive the 13% pullback since the Nov. 16 highs.

Additionally, Santiment explains that retail traders have also been selling into “any small XRP rally,” and the scenario following the rally to $1.26 was no different.

“Wallets with under 1M XRP have collectively dumped 75.7M tokens (worth $87.9M) this past week,” the onchain data provider said in a Nov. 17 post on X.

Interestingly, the tokens dumped by retail traders were scooped up by whale and shark wallets holding between 1 million and 100 million tokens, a potentially bullish signal going forward.

Santiment notes that:

XRP whale wallet holdings. Source: Santiment

The volatility, meanwhile, caught long traders off-guard when XRP sharply turned away from its multi-year high of $1.26.

Data from CoinGlass shows that the XRP derivatives market witnessed over $12.6 million worth of liquidations on Nov. 17, out of which $9.1 million were long, with the tally continuing at the time of publication.

More than $3.9 million in leveraged long positions have been liquidated over the last four hours alone.

XRP liquidations. Source: CoinGlass

When long positions are liquidated, it generally involves selling off the asset (voluntarily or by the broker), pulling prices down further.

XRP price ‘overbought’ on multiple timeframes

A heatmap of XRP’s Relative Strength Index (RSI) currently shows overbought conditions in four out of six timeframes, according to data from CoinGlass.

By comparison, Bitcoin’s RSI is overbought on three of six timeframes.

Crypto market RSI heatmap. Source: CoinGlass

Overbought conditions generally describe recent movements in the price of an asset and reflect an expectation that the price trend may correct soon.

But despite this popular metric showing potential overheating, traders believe that the XRP price rally is not over.

“It’s so early in the cycle for such an XRP pump,” said independent trader Chris McCrypto in a Nov. 16 post on X, adding that XRP price could go as high as $15–$20.

Meanwhile, pseudonymous analyst CryptoCharged opined that the ongoing pullback has seen the price retest key levels “to perfection” and a drop to the $0.65 and $0.75 zone would reset the chart for another move higher.

Source: CryptoCharged

This article does not contain investment advice or recommendations. Every investment and trading move carries risks, and readers should conduct their own research when making a decision.