XRP Long-Term Holders Are Accumulating Ahead of a Potential 40% Price Drop to $1.21

Despite this apparent bullishness, technical indicators suggest a potential 40% decline towards $1.21.

Long-term holders of XRP are once again accumulating, a trend that has often been observed to precede market corrections, according to Glassnode. However, despite this apparent bullishness, technical indicators suggest a potential 40% decline in XRP towards $1.21.

Long-Term Holder Accumulation: A Cautionary Tale

Data from Glassnode shows that the “Percent of XRP Supply Last Active 1+ Years Ago” has begun to rise after a substantial decrease during XRP’s rally above $3 in early 2025.

While this uptick may indicate a return of confidence among dormant holders, an examination of previous market cycles reveals a concerning pattern. Periods of rising "Percent of XRP Supply Last Active 1+ Years Ago" have often coincided with either price stagnation or declines.

During XRP’s ascent to a multi-year high of $3.40, the dormant supply metric fell sharply, indicating that long-term holders were selling into the rally. However, this trend has reversed since February 2025, suggesting that holders are now locking up their assets as prices have declined by over 30%.

These patterns closely resemble those observed during the bear markets of 2018 and 2021. For instance, in late 2017, when XRP reached an all-time high of $3.55, there was a surge in selling activity among long-dormant holders. A similar scenario unfolded in 2021 when XRP hit a local peak around $1.80, followed by distribution among long-term holders and subsequent price consolidation.

Descending Triangle Signals Potential Breakdown

Furthermore, XRP is forming a descending triangle on its weekly chart, a pattern that is typically associated with bearish breakdowns. As of April 3, 2025, XRP is trading within a critical support range of $1.95 to $2.00. A breakdown below this level could lead to a fall towards $1.21, a significant historical resistance level that may now act as support. The declining Relative Strength Index (RSI) also indicates bearish momentum.

Understanding the cyclical nature of XRP’s market movements is crucial for traders and investors. Throughout history, XRP has exhibited a pattern where sharp price increases are met with profit-taking by long-term holders, ultimately leading to corrections.

Key Technical Indicators and Market Outlook

* XRP is forming a descending triangle on the weekly chart, suggesting a potential breakdown.

* Critical support zone: $1.95 to $2.00. A breakdown below this range could open the path for a move towards $1.21.

* Relative Strength Index (RSI) is in a declining trend, indicating bearish momentum.

* Long-term holders are accumulating, which is often observed during market corrections.

Trading Strategies for XRP Investors

Short-Term Trading Approach

* Enter short trades at the upper boundary of the triangle with a stop loss above recent highs.

* Aim for a target at the lower boundary of the triangle.

* Consider using technical indicators like RSI and MACD to confirm trading signals.

Long-Term Investment Strategy

* Average down on any further price declines, especially if there is a strong macroeconomic recovery.

* Set a long-term price target based on Fibonacci retracements or other technical analysis methods.

* Stay informed about any major technical formations or shifts in market trends.

Final Thoughts: Caution Amid Accumulation

While the fact that long-term holders are accumulating suggests renewed confidence in XRP, it’s important to note that periods of such accumulation have often been observed to precede market corrections. Technical indicators are also signaling potential bearish formations, which traders should keep in mind.

As always, comprehensive market analysis and sound risk management strategies are crucial for navigating the ever-changing cryptocurrency landscape.