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XRP has been under intense selling pressure over the past few days, struggling to surpass the $0.64 resistance level. This inability to break through has led to a sharp 17% decline, bringing the cryptocurrency near its 200-day moving average at $0.54—a crucial support level for its ongoing price trajectory.
Profit-taking has intensified the selling pressure, overshadowing other developments related to the token, causing XRP to continue its decline for the second consecutive session.
On Tuesday, Ripple announced a partnership with Japanese financial giant SBI Digital Commodity to promote the use of the XRP Ledger within the Web3 community. Despite this positive news, which should have boosted XRP adoption, the price remained largely unaffected.
Furthermore, just a week ago, Ripple concluded its nearly four-year legal battle, winning the case. While XRP initially rallied 30% to $0.64 following this favorable outcome, it quickly retraced back to $0.55.
On-chain data from Santiment reveals that investors have consistently taken profits on their XRP holdings, withdrawing over $230 million in gains in August so far—exceeding the profit-taking seen in July.
The Network Realized Profit/Loss (NPL) metric indicates that XRP traders have been locking in profits, as evidenced by positive spikes since the start of August. This has added further pressure on the coin, pushing it below the $0.57 support zone. Additionally, XRP’s social dominance has declined sharply, dropping from 4.55% to 1.65% in the past week.
The 200-day moving average at $0.54 now serves as a critical support level. A rebound from this point could indicate that the recent decline is merely a corrective move, allowing XRP to regain momentum and potentially retest the $0.64 resistance level.
However, other market indicators, including a bearish divergence in the RSI, suggest that the risk of a more extended bearish trend remains significant.
Notably, at its current value of $0.568, XRP has seen considerable recovery since touching a year-to-date low of $0.38 on July 5th.
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