XRP Price Dynamics: Recent Volatility and Market Reactions
Over the past two weeks, XRP has exhibited significant price volatility, leaving traders vigilant as they navigate the market’s turbulent waters. The cryptocurrency briefly dipped below the $2 mark, only to rebound swiftly to a high of $2.8 within just a few days. This price behavior reflects broader trends in the cryptocurrency market, which ended February with a steep decline before experiencing a resurgence in early March. This recovery was partially driven by Donald Trump’s comments hinting at a potential crypto reserve in the United States. However, on-chain analysis indicates a substantial sell-off by major holders following the surge.
Impact of Trump’s Cryptocurrency Announcement on XRP
XRP experienced a notable rally following an unexpected announcement from Donald Trump on Sunday, March 2. The former US president unveiled plans for a US Crypto Strategic Reserve that would incorporate XRP alongside other major cryptocurrencies like Bitcoin, Ethereum, Solana, and Cardano. This announcement ignited a buying spree throughout the market, propelling XRP to an intraday surge of over 30% and briefly pushing its price towards the $3.00 threshold.
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Despite the initial excitement, the rally was short-lived. Within 24 hours of the announcement, XRP relinquished a significant portion of its gains as sell orders inundated the market. After peaking above $2.8 due to the Trump-induced rally, the price quickly pulled back by approximately 10%. By Tuesday, XRP was trading in the mid-$2 range once more. Notably, on-chain data reveals a massive sell-off by whale investors, who are individuals or entities holding substantial amounts of the token. Crypto market analyst Miles Deutscher highlighted this trend on X (formerly known as Twitter), citing data from the on-chain analytics platform CryptoQuant.
Whale Activity and Market Distribution
Deutscher’s observation was accompanied by a chart illustrating significant profit-taking by whales, describing the market’s behavior as a textbook example of a distribution phase. In this phase, early investors capitalize on a strong rally to exit their positions en masse. For XRP, early investors are those who acquired the token during its prolonged bear market, when prices were under $0.5. The momentum, which began building in late 2024, has driven the altcoin’s price from approximately $0.55 in early November to over $3 by January 2025.
The CryptoQuant chart corroborates ongoing whale sell-offs, with whale flows reaching a negative peak of over 180 million XRP in early March, marking the highest level in years. Concurrently, exchange data reveals an increase in XRP supply on trading platforms. For instance, Binance’s XRP reserves have surged from 2.72 billion to 2.90 billion tokens in recent days. As of this writing, XRP is trading at $2.46 and is showing signs of recovery as it attempts to approach the $3 mark once again.
Featured image from Medium, chart from Tradingview.com
