Ripple Price Forecast: XRP offers bearish signals as whales reduce exposure in September

• XRP sell-off intensifies below $3.00, reflecting risk-off sentiment in the broader cryptocurrency market.
• Large holders reduced exposure to XRP in September, delaying a potential breakout toward record highs.
• Network activity remains low, indicating a decline in demand for XRP.

Ripple (XRP) is showing bearish signs, trading at $2.85, down over 3% on Monday. Attempts to keep the cross-border money remittance token above $3.00 failed amid heightened volatility, as investors reduced their exposure on fears of prolonged losses this week. 

Traders are grappling with 24-hour liquidations swelling to $1.7 billion for the entire crypto market and $74 million for XRP. The topside-heavy XRP’s technical picture signals further declines – a move likely to be accentuated by suppressed network activity and risk-averse sentiment among large volume holders.

XRP declines as whales de-risk 

Interest in XRP declined significantly in September compared to the previous months, reflecting a risk-averse sentiment and the general perception that September tends to be a bearish month for cryptocurrencies.

According to Santiment data, wallets holding between 1 million and 10 million XRP have since September 1 reduced their holdings by 0.27% of the total supply, down to 10.48% on Monday.

A similar trend is noticeable for the cohort with 100 million and 1 billion XRP, whose holdings have decreased from 14.38 to 13.88% of the total supply over the same period. 

Although percentage declines may seem small, they tally up considering the massive 99 billion XRP total supply, according to CoinGecko. If this de-risking trend persists, supply could continue to outweigh demand, potentially delaying the anticipated breakout above $3.00.

XRP Supply Distribution | Source: Santiment 

On-chain data corroborates the loss of interest among the whales, with active addresses suppressed to around 31,000 on Monday. This is a significant drop compared to peak levels of approximately 581,000 in June. 

The chart below shows that after the surge in active addresses, the XRP price broke out in June, with the rally reaching a record high of $3.66 on July 18. Higher network activity increases demand for XRP, reflecting growing adoption and improving sentiment. If addresses transacting on the protocol remain subdued, bulls will face difficulty sustaining the uptrend, keeping the breakout at bay.

XRP Active Addresses | Source: Santiment 

Technical outlook: Can XRP defend key support?

XRP is currently holding between two key levels: The support provided by the 100-day Exponential Moving Average (EMA) at $2.83 and the 50-day EMA resistance at $2.95. Despite this short-term support, XRP exhibits a bearish outlook, as evidenced by the Relative Strength Index (RSI) declining from 61 to 44. 

Investors will also consider reducing their exposure, as the Moving Average Convergence Divergence (MACD) indicator maintains a sell signal confirmed earlier in the day. This signal occurs when the blue MACD line crosses and settles below the red signal line.

XRP/USDT daily chart

If the down leg extends further below the 100-day EMA, the next tentative support lies at $2.70, tested by a candle wick earlier in the day, and the 200-day EMA at $2.59. Still, a reversal above the $3.00 level cannot be ruled out, especially if traders buy the dip, thus fuelling a price recovery.