- XRP selling pressure has subsided in the short term, based on metrics and price action
- The rising leverage ratio was the result of bullish optimism, but also a warning to futures/capital traders
XRP has been in the news this week after hitting a seven-year high and surging past the $3 mark on the charts. Since January 1, the altcoin is up 52%, while whale accumulation is also strong. In fact, Whales have purchased more than 1.4 billion XRP in the last two months – a 35% increase in demand.
Statistics also revealed reduced deposits of XRP on exchanges. Therefore, AMBCrypto analyzed this development along with other metrics to understand whether they bode well for XRP bulls or not.
XRP – Mixed signals need to be decoded
This metric tracks the total number of deposit transactions on exchanges. The higher the number, the greater the chance of an impending sell-off. Larger deposits generally indicate selling pressure. It could also imply more margin trading, using XRP as collateral.
During the consolidation phase in December, XRP deposits saw significant upward spikes. However, the bulls were able to hold the psychological support at $2 against the selling pressure. Deposits were low during the last rally, meaning selling pressure has remained relatively low in recent days.
In early November, the price of XRP started moving higher rapidly. The estimated leverage ratio (ELR) measure also rose. The ELR is the Open Interest of the exchange divided by the coin reserves. It provides insight into whether or not participants are engaging in higher leverage trading, which usually happens during a strong uptrend.
The ELR experienced some calm in the second half of December due to the consolidation. The recent break past $3 pushed the ELR higher, providing a warning sign for traders.
Over the past two weeks, XRP exchange reserves have increased. This can be seen as a bearish sign, one that is not in line with declining deposit numbers.
The conclusion is that there may be some selling pressure due to profit taking, but not enough to stop the bulls. This finding makes it more likely that traders used XRP as collateral in margin trading.
Read Ripple’s [XRP] Price forecast 2025-26
Rising ELR and foreign exchange reserves together suggested that volatility could hurt traders in the short term. Liquidity chases and a consolidation period could follow, but it is uncertain when that will be.