Profitable XRP Supply Hits Yearly Low as Price Falls 35% From All-Time-High

XRP has maintained a downward trend since reaching an ATH of $3.40 on January 16. Currently, it is trading at $2.18, recording a 35% price drop over the past two months.

This double-digit decline has led to a decrease in the amount of XRP tokens held in profit. On-chain data shows that negative sentiment towards this altcoin is increasing, suggesting a prolonged decline.

XRP sees a decline in new demand, signaling a slowdown in market interest

As the price of XRP has declined, the total supply held in profit has also decreased. According to Santiment, this has dropped by 6.39 billion in the past week to reach a low for the year. Also Read.

At the time of writing, 87.95 billion tokens out of the total supply of 99.98 billion are being held in profit. This suggests that some investors are currently holding XRP at a loss, reflecting increasing selling pressure and weakening market sentiment. Also Read.

Furthermore, on-chain data also shows a decline in new demand, with the daily new XRP buy-side volume dropping significantly this month. According to Santiment, only 4,516 new wallet addresses were created on Sunday to trade XRP.

This is the lowest daily new demand for XRP since the start of the year.

When an asset sees a decline in new demand, it means fewer investors are buying it. As observed with XRP, this has reduced trading activity and weakened price support in its spot market. It signals that market interest in this altcoin is waning and could contribute to further price declines if selling pressure remains high.

XRP faces selling pressure: Will the bulls break the downtrend?

On the daily chart, XRP has been trading below a descending trendline since reaching its ATH, reflecting a downtrend.

This bearish pattern is formed when an asset's price consistently creates lower highs over time. It indicates that sellers are in control, and unless the price breaks above the trendline, further declines are likely to occur.

XRP is trading at $2.17 at the time of writing, significantly below this descending trendline. With the downtrend gaining momentum, the token's price could drop further from this trendline. In that case, the value of XRP could decline to below $2 to $1.47.

However, if buying pressure increases, XRP could break above the descending trendline and rise to $2.93.