- There has been a noticeable surge in the number of XRP addresses over the past few days.
- These new market entrants are beginning to sell as price and sentiment shift to a bearish phase.
The major market gains recorded by XRP over the past days has notably declined, as selling pressure increased. Its past 24-hour gains have dropped 5.26% as of press time.
This sentiment could be overturned if new market entrants begin to hold for the long term. However, selling pressure is increasing.
How will active addresses impact XRP?
According to recent data from Glassnode, the number of active XRP addresses saw a massive jump in the past weeks.
So, active addresses grew by 620% during this period, rising from 74,589 to 452,650. A surge like this typically indicates increased demand, which positively impacts price, as it has done.
Source: Glassnode
However, after active addresses peaked at a new high on the 2nd of March, they have since declined to their current count.
A drop in active addresses suggests that previous XRP holders have sold their tokens, likely realizing profits.
This bearish sentiment is evident in the derivatives market, where key metrics indicate that market participants are selling and that XRP could decline further.
Key metrics turn bearish
The Open Interest Weighted Funding Rate highlighted market sentiment more accurately by adjusting funding costs based on Open Interest.
A negative rate indicates selling pressure, while a positive rate suggests buying activity.
At press time, the OI-Weighted Funding Rate has dropped to -0.0022%, after peaking at 0.0103% in the early hours of the 3rd of March, when buying pressure was high.
Source: Coinglass
Selling pressure in the derivatives market is gradually increasing, as the ratio has fallen to 0.9798, below the 1.0 threshold, indicating a sell-off is taking place.
Losses could deepen if XRP trading volume drops below the 0.9 level.
Amid this, sellers have gained confidence in a potential price drop. At the time of writing, the Funding Rate stands at -0.0098%, indicating that sellers are taking over gradually, paying a premium to maintain their positions.
Spot traders are selling
There has been a major sell-off from spot traders across top exchanges in the past 24 hours.
U.S. retail investors are leading the sell-off, with U.S.-based exchanges Coinbase and Kraken selling a combined $34.68 million, while Bybit and Binance bought a total of $34.45 million worth of XRP.
Source: Coinglass
This brings net flow across these top exchanges to $230,000, meaning more selling than buying occurred in the spot market, adding to XRP’s downward trend.
If top investors continue selling, XRP could erase its 0.90% gain from the past month, putting investors back in a loss.
